University and Student
Finance
Howard Croall
Bolton
Jonathan
HeadFee
of Manager
Student
Student
Finance
Paul Cropper
Deputy Director of
Finance
Topics
Part 1 – University Finances
• Where does the university get its money from?
• Where is the money spent?
• How is money distributed within the university?
• What is the financial state of the university and the sector?
• What is your responsibility for finances?
• What is the Transparency Review?
Part 2 – Student Finances
• How are students funded and what do they pay?
• Where can advice and support be found?
Financial Services Mission
To support the recruitment and retention of students by maximising the
investment of human and physical resources devoted to teaching and
learning.
We will achieve this by:
• ensuring that the university remains financially strong
• achieving best value for money in all activities
• ensuring that decisions are taken within a framework where risk is
acknowledged, monitored and controlled
Income & Expenditure – 2010/11
Income
Expenditure (before FRS 17)
£m
139.0
123.5
15.5
This is the income and expenditure for the day to
day running of the University, including
discontinued operations.
Where the money comes from?
Funding Council Grants
Tuition Fees and Education Contracts
Research Grants and Contracts
Catering and Conferences
Health Authorities
Other Sources
Interest Receivable
Total
£m
61.8
51.4
3.1
1.1
12.9
7.9
0.8
139.0
Funding Council
Grants
Tuition Fees and
Education Contracts
Research Grants and
Contracts
Catering and
Conferences
Health Authorities
Other Sources
Interest Receivable
What does the HEFCE pay per FTE
student in 2011/12?
Price group
Depends on the price
group within which a
module falls and the
mode of study
B
C
D
Mode
£
FTS
6,239
SW (year out)
4,771
PT
6,863
FTS
4,771
SW (year out)
4,771
PT
5,248
FTS
3,670
SW (year out)
4,771
PT
4,037
What and where?
What the money was spent on:
Staff
Staff Restructuring
Depreciation
Other Operating Expenses
Interest Payable
Total
Where the money was spent:
Academic Departments
Academic Services
Research Grants and Contracts
Catering and Conferences
Premises
Administration and Central Services
Other
Staff Restructuring
Total
£m
73.4
0.3
3.5
38.8
2.5
118.5
Academic
Departments
Academic Services
Research Grants
and Contracts
Catering and
Conferences
£m
60.5
17.1
3.4
1.1
13.8
17.0
5.4
0.2
118.5
Premises
Administration and
Central Services
Other
Staff Restructuring
Balance Sheet at 31 July 2011
Net Assets
Fixed assets
Endowment investments
Current assets:
Debtors
Investments
Cash
Short term creditors
£135,381k
£293k
£14,666k
£3,351k
£47,094k
£65,111k
(£27,781k)
Net Current Assets
£37,330k
Total Assets Less
Current Liabilities
£173,004k
Long Term Creditors
Provisions
(£0k)
(£309k)
Pension Liability
(£37,503k)
Net Assets
£135,192k
Total Funds
Deferred capital grants
Endowments
Reserves:
Revaluation reserve
I&E reserve
Total Reserves
£40,061k
£68,129k
£108,190k
Total Funds
Total Funds
£135,192k
£26,709k
£293k
How is the money distributed?
The DevRev model is
simple, straightforward
and transparent. All
qualifying income is topsliced to give the strategic
provision [SP] and the
remainder is split between
schools and
infrastructure.
Strategic provision
Schools
Infrastructure
How much is distributed in 2011/12?
Devolved Revenue model for 2011/12:
Schools
Services
Strategic provision
4% Reserves
£60.8m
£29.1m
£12.8m
£4.3m
57%
27%
12%
4%
Allocation to schools and services in 2011/12
(Including Barnsley and Oldham activity)
Schools
Human & Health
Art, Design & Architecture
Computing & Engineering
Business
Applied Sciences
Education & PD
Music, Humanities & Media
PCET Consortium
£15.0m
£8.3m
£8.2m
£8.1m
£8.7m
£6.3m
£6.3m
£3.8m
Services
Estates
Computing & Library
Finance
Marketing
VCO
University Campuses
Human Resources
International Office
PINS
Student Services
Research & Enterprise
Registry
£9.3m
£8.0m
£1.8m
£1.8m
£1.6m
£1.5m
£1.4m
£1.0m
£1.0m
£0.8m
£0.6m
£0.5m
Financial Security of Universities (Each institution
is scored on the basis of it’s financial strength)
The Security Index 2009-10
700
Lower Quartile: 240.00
Average:
329.99
Upper Quartile: 405.00
Huddersfield 2009-10, 520.00
600
Huddersfield 2008-09, 439
500
Huddersfield 2007-08, 399
Huddersfield 2006-07, 370
400
300
200
100
0
Lower Quartile
Mid Range
Upper Quartile
Condition of the Estate (A and B represents
good quality)
Percentage of Estate classed as condition A or B 2009-10
100.0
90.0
Lower Quartile: 66.20%
Average:
75.32%
Upper Quartile: 90.00%
The University of Huddersfield, 85.0
Huddersfield 07-08 & 08-09, 77.0
Huddersfield 06-07, 75.5
80.0
70.0
60.0
50.0
40.0
30.0
20.0
10.0
0.0
Lower Quartile
Mid Range
Upper Quartile
Surpluses/(Deficits) for each institution
Percentage of Historical Cost Surplus / (Deficit) to Total Income (excluding FRS17) 2009-10
25
Lower Quartile: 1.73
Average:
4.15
Upper Quartile: 7.08
20
Huddersfield 2009-10, 14.17
15
Huddersfield 2008-09, 8.02
10
Huddersfield 2007-08, 4.61
Huddersfield 2006-07, 3.79
5
0
-5
-10
Lower Quartile
Mid Range
Upper Quartile
Staff costs as a percentage of income
Percentage of Staff costs (excluding FRS17) to Total Income 2009-10
80
Lower Quartile: 51.76
Average:
54.52
Upper Quartile: 59.00
Huddersfield 2007-08, 59.32
Huddersfield 2006-07, 59.21
70
Huddersfield 2009-10, 54.54
Huddersfield 2008-09, 58.79
60
50
40
30
20
10
0
Lower Quartile
Mid Range
Upper Quartile
Teaching grant from the Funding Council as a
percentage of total income
Percentage of Recurrent Teaching Grants to Income 2009-10
70
Lower Quartile: 18.00
28.07
Average:
Upper Quartile: 37.42
60
Huddersfield 2006-07, 45.06
Huddersfield 2009-10, 39.49
Huddersfield 2007-08, 43.26
50
Huddersfield 2008-09, 42.03
40
30
20
10
0
Lower Quartile
Mid Range
Upper Quartile
Historical cost surplus as a percentage of
total income
Historical cost surplus as a percentage of total income
14.0%
University
Sector
12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
2005/06
2006/07
2007/08
2008/09
2009/10
2010/11
Total staff costs as a percentage of total
income
65%
Total staff costs (excluding restructuring and FRS 17)
as a percentage of total income
Sector
University
60%
55%
50%
2005/06
2006/07
2007/08
2008/09
2009/10
2010/11
Liquidity
Liquidity (as days of expenditure)
200
University
150
Sector
100
50
0
2005/06
2006/07
2007/08
2008/09
2009/10
2010/11
Sector Risks
•
•
•
•
•
•
•
•
Admissions
International students
Government funding
Finances and investments
Capital expenditure
Pay costs
Pension costs
Business links
Financial Context
Reduced funding expected from:
•
•
•
•
•
HEFCE Teaching grant
HEFCE Research grant
NHS income
TDA grant
Part-time fee income
Increased funding expected from:
• Full-time Home & EU undergraduate fee per student
• Overseas students
• Research and Enterprise activity (matched by expenditure)
Financial controls
“To conduct its business effectively a University needs to
ensure that it has sound financial management systems
in place and that they are strictly adhered to…...
Compliance with the financial regulations is compulsory
for all staff connected with the University.”
Financial controls - Responsibilities
University Council
Financial Services
Individual Schools and Services
Role of Council
Responsible for:
• Effective and efficient use of resources, the solvency of the
University and for safeguarding its assets
• Approving annual estimates of income and expenditure
• Considering and approving the annual accounts
These responsibilities may not be delegated.
However, Council must establish a (Finance) Committee (and an Audit
Committee).
Also must:
• make financial rules to ensure the proper administration and control
of the University’s resources
• cause to be kept accounts and records
• approve arrangements to determine tuition and other fees
Members must declare any financial interests
Financial regulations – Financial control
• The Vice-Chancellor is the University’s designated accounting
officer and is responsible for the regulation, direction and
management of the University
• The Director of Finance controls day to day financial administration
• The Dean/Director or Head of Service is responsible for financial
management in his own area – he/she is advised by Financial
Services in executing his/her financial duties and assisted by
management information provided by Financial Services
Financial control - Financial Services
Responsible for:
• Annual revenue budget and capital programme
• During the year producing revised budgets
• Rolling five year financial plan
• Preparing financial information, monitoring and control of income
and expenditure against budget
• Submitting budgetary reports on all aspects of the University’s
finances to University committees
• Preparing financial statements and other financial returns and
reports
• Ensuring that the university maintains satisfactory financial systems
Financial control - Schools & Services
Responsible for:
• Economic, effective and efficient use of resources
• Safeguarding assets allocated to them
• Producing detailed budgets using the resources made available to
them
• Control of income and expenditure within the agreed budget
including effective day to day monitoring
• Reporting significant departures from agreed budgets
• Establishing and maintaining clear lines of responsibility within the
school/service for all financial matters. Where resources are
devolved to budget holders they are accountable to the
dean/director or head of service for their own budget
Financial regulations – What do
they contain?
Guidance provided on:
• Financial Control
• Income and banking
• Research grants and contracts
• Expenditure
• Salaries and wages
• Assets
• Other (e.g. Risk management)
Financial regulations – Operational issues (1)
• Cash Receipts – all monies received must be recorded daily and
paid into Financial Services at least weekly
• Collection of debts – all invoices must be raised promptly on official
University invoices. Financial Services are responsible for
implementing credit arrangements and taking swift and effective
action to collect overdue debts.
• Petty cash – items less than £10 should be paid by purchasing card.
If not possible use petty cash. Receipts or vouchers must be
obtained. Each school/service is responsible for safe keeping of
cash. Financial Services agree total available to each school/service
and reimburse funds before total amount has been spent.
Financial regulations – Operational issues (2)
• Ordering goods – use orders produced from the University’s finance
system (except petty cash, purchasing cards)
• Tendering - £3k-£25k (quotes); £25k upwards (tenders); >£139,893
(EU threshold tenders)
• Payment of invoices – weekly payment run by automatic transfer
into suppliers bank accounts. The University’s terms of payment are
30 days from receipt of invoice
• Employees’ expenses – must be in accordance with Expenses and
Benefits Procedures Manual, authorised by line manager. Weekly
payments into account of employee
Risk management
Review process:
• Corporate risks identified
• These risks are considered by the Audit Committee before going to
Council
• The risks are included with the strategic planning contextual
document circulated to Deans and Directors
• Deans and Directors identify the key risks they face and these are
included within their planning document
• Corporate and local risks are reviewed during the year
Finance policies and procedures
Available on the Financial Services pages of the University web site:
• Financial regulations
• Master forms
• Fraud and corruption response plan
• Expenses and benefits procedures manual
• Guidance notes (budgets, etc…)
• Treasury management policy
• Insurance guide
Fraud and Corruption Plan
The plan defines the process to enable the University to:
•
•
•
•
•
•
•
•
•
•
Prevent further loss
Notify the Police of any potential criminal act
Establish and secure evidence necessary for disciplinary action
Notify HEFCE, if appropriate
Keep all personnel with a need to know suitably informed
Inform the police and establish lines of communication with them
Assign responsibility for investigating the incident
Review the reasons and prevent a recurrence
Recover losses
Take appropriate disciplinary action
Transparency Review at Huddersfield
• Costing the activities of the University of Huddersfield
• Process is driven via a web site http://tranrevw.hud.ac.uk.
• Assistance available from the costing team and
school/service champions
• Objective is to minimise the burden on staff
• Full economic costing
Financial Support for Students
Academic Year 2011/12 Onwards
Tuition Fee Rates 2011/12
• Fees of up to £3,375 from 2011/12 are to be charged in
respect of full-time courses at HEFCE funded
institutions.
• Excludes NHS, TDA, post-grad, part-time courses.
• Part-time fees are set by each university for each
course, usually pro-rata to the standard full-time fee.
Key Point
• Parents don’t pay tuition fees.
• Students don’t pay tuition fees.
• Graduates pay tuition fees.
Tuition Fees
• Universities can charge up to £3,375 per year.
• No student now needs to pay up front.
• Tuition Fee Loans to cover cost – administered by the
government.
• Tuition fee income helps the University to improve
facilities and offer a better student experience.
Student Financial Assistance
• Means tested Maintenance Grants of up to £2,906.
• Means tested University Bursaries.
• Student Maintenance Loans.
• Tuition Fees of up to £3,375 – No Means Testing.
Grants – for living expenses
• Means tested non repayable grant of up to £2,906
from the government.
• Each university will have to pay a minimum £338
bursary to students that receive the full grant.
• Huddersfield offers up to £500 means tested bursary
Student Maintenance Loans
• Available to all full time students
• Elsewhere - £4950
• Living at Home - £3838
• The amount of loan you will be eligible to apply for will
depend on the amount of state grant you receive. Eg.
The loan will be reduced by £0.50 for every £1 of grant
the student receives up to a maximum reduction of
£1453.
Financial Support (non-repayable grants)
Government
Grant
Additional support from Huddersfield
Government Grant
For students with family
income up to £25,000.
Partial grants available for
students with family income
up to £50,020
Students with family income up to £25,000 per year
£2,906
£500 per yr
Paying it Back
Income Each Year
Up to £15,000
Monthly repayment
Repayment as a
Percentage of
Income
0
0
£16,000
£7.50
0.6
£17,000
£15
1.1
£18,000
£22.50
1.5
£19,000
£30
1.9
Income of Huddersfield students or their families
Income distribution University of Huddersfield 2007-08
(Student Loan Company data)
70.0
60.0
Cumulative percent
50.0
40.0
30.0
Dotted purple line
indicates anticipated grant
eligibility in 2008-09
20.0
10.0
0.0
0
2.5
5
7.5
10
12.5
15
17.5
20
22.5
25
27.5
30
32.5
35
Residual incom e £k
37.5
40
42.5
45
47.5
50
52.5
55
57.5
60
Part-time students
Will generally pay at half the full-time rate (of £562.50 per
20 credit module) ie £300 per 20 credit module.
Currently these fees continue to be paid “up-front” (ie
are not included in the new deferred fees regime for
full-time students).
2012/13 onwards
• Changes to the student support system
• We are charging £7950 per year for our undergraduate
degree courses.
• Tuition Fee Loan covers all the fees
• Student Loans and Grants available as before
• New National Scholarship Scheme
• Students repay after graduation – threshold rises to £21k
Points to remember
• Students don’t pay fees up front
• Students from lower income families will be better off
while they study
• Graduates earn an average income premium of 40%
over a lifetime
• Not a debt – an investment!
Useful contacts – internal/external
•
Student Fee and Bursary Manager [U]
– Jonathan Croall
01484 472536
•
Inland Revenue
www.inlandrevenue.gov.uk/taxcredits
•
DfES
www.dfes.gov.uk/studentsupport
•
Teacher Training
0845 6000 992
www.canteach.gov.uk
•
Student Loans Company
0800 405 010
www.slc.co.uk
Disabled Students’ Allowances
0800 731 9133
www.dfes.go.uk/studentsupport/formsandguid
es/index.shtml
•
Child Tax Credit helpline
0800 500 222
•
NHS Student Grants Unit
01253 655655
•
National Union of Students
www.nusonline.co.uk
•
Scholarship Search UK
www.scholarship-search.org.uk
•
Educational Grants Advisory Service
www.egas-online.org.uk
Student Support Manager [U]
– Jean Adams-Mack
01484 473201
www.hud.ac.uk/finance/index.htm
Student Income Manager [U]
– Kirsty White
01484 472569
•
Want to know more about university
finances?
Information is available from:
• University web site (www.hud.ac.uk/finance/index.htm)
• HEFCE web site (www.hefce.ac.uk)
– A guide to UK HE
(http://www.hefce.ac.uk/pubs/hefce/2009/09_32/)
– How HEFCE allocates its funds
(http://www.hefce.ac.uk/pubs/hefce/2008/08_33/)
• Student Finance Office (level 8)
• Financial Services Department (level 8)
• Published accounts and other financial reports