FINANCIAL REGULATIONS
ABSTRACT FOR CIRCULATION TO
UNIVERSITY STAFF
April 2004
These regulations are effective from 1 August 2000
Table of Contents
1.
INTRODUCTION .......................................................................................................... 3
1.1
1.2
1.3
1.4
1.5
1.6
1.7
1.8
2.
CONTROL FRAMEWORK........................................................................................... 9
2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
8.
DEFINITIONS ........................................................................................................................................ 3
PURPOSE OF FINANCIAL REGULATIONS ......................................................................................... 5
APPROVAL OF FINANCIAL REGULATIONS ....................................................................................... 6
EXPECTED STANDARDS OF CONDUCT AND PROBITY .................................................................. 6
FRAUD AND IRREGULARITY .............................................................................................................. 6
WHISTLE-BLOWING ............................................................................................................................ 7
SCOPE .................................................................................................................................................. 7
KEY CONTACTS ................................................................................................................................... 8
BOARD OF GOVERNORS .................................................................................................................... 9
AUDIT COMMITTEE ...........................................................................................................................10
REMUNERATION COMMITTEE .........................................................................................................10
FINANCE & RESOURCES COMMITTEE ...........................................................................................11
VICE CHANCELLOR ...........................................................................................................................12
DEPUTY VICE CHANCELLOR, BUSINESS & RESOURCES ............................................................12
DIRECTOR OF FINANCE & LEGAL SERVICES ................................................................................12
ALL MEMBERS OF STAFF .................................................................................................................13
HOSPITALITY AND GIFTS ....................................................................................... 14
ANNEX A: SEVEN PRINCIPLES OF PUBLIC LIFE ....................................................................................15
INTRODUCTION
DEFINITIONS
1.1.1
In these Regulations the following terms have the meanings given below:-
The ‘Board’ means the Board of Governors and shall include, unless specifically
provided otherwise, those committees to which financial arrangements may, in whole or
part, have been delegated;
The ‘SMT’ means the Vice-Chancellor and the staff together forming the Senior
Management Team as appointed by the Board of Governors. [On 1 August 2000 this
comprised the Vice-Chancellor and the Deputy Vice-Chancellors for Academic Affairs
(AA) and Business and Resources (B&R).]
‘Income and Expenditure’ means any income due to or expenditure incurred by the
University for whatever purpose (including, inter alia, capital);
‘Vire or Virement’ means the transferring of a budget given for a specific purpose for
another purpose;
‘Central or Demand-Led Budget’ means a part of the University’s income and/or
expenditure that has a nominated Budget holder but where the surplus or deficit is not
carried forward from one year to the next. In addition, expenditure can only be incurred
for the express purposes agreed by SMT and the budget cannot be vired for other
purposes except as authorised by SMT;
‘Budget Centre’ means an area of the University’s income and / or expenditure for which
responsibility has been delegated to a Budget Manager, where any surplus or deficit
made in one financial year is carried forward to be added to or deducted from the
following year’s net budget allocation to the budget centre;
‘Budget Manager’ means a member of staff to whom the SMT has delegated control of
a budget and delegated representative(s) means the named member(s) of staff to whom
the Budget Manager has delegated financial authority with the prior approval of the
Director of Finance & Legal Services;
‘Net Delegated Budget’ (“NDB”) means the net amount of resource which has been
delegated by SMT for a budget centre, so enabling a particular group of objectives to be
achieved. Such amounts can be supplemented by the budget centre generating
additional income from which an agreed proportion or amount will be credited to the
budget centre. To this extent the Budget Manager is able to vire sums to other purposes
consistent with its strategic or operating statement agreed with SMT;
‘Planned Net Expenditure’ means the net expenditure which it is planned that a budget
centre will incur in a financial year;
‘Budget Centre Surplus or Deficit’ means the difference between a budget or NDB
allocated for a particular year and the actual net expenditure incurred for that year;
‘Financial Limits’: all amounts specified in these regulations are inclusive of Value
Added Tax,
‘Authorisation’ means the prior agreement given in writing (or in any form approved by
the Director of Finance & Legal Services) by a person or body empowered to do so
under these regulations, after satisfying themselves that the action is consistent with
these regulations;
‘Certification’ means confirmation given in writing by a person or body empowered to do
so under these regulations, that an action has taken place consistent with these
regulations and that a payment or other action is now required.
‘Head of Internal Audit Services’:
an employee of the University or the firm of
accountants appointed to provide internal audit services.
PURPOSE OF FINANCIAL REGULATIONS
1.2.1
The University has developed these financial regulations so that it can
demonstrate that it:
a)
b)
meets the high standard of accountability expected when dealing with public
funds, which in one form or another makes up over half of our income;
operates with due regard for economy, efficiency and effectiveness;
c)
safeguards its assets from loss due to fraud, theft or extravagance;
d)
invoices and collects funds due to it, and accounts for payments to employees
and suppliers promptly and accurately; and
e)
effectively manages the University’s cashflow, investments and borrowings.
1.2.2
These regulations create a framework of financial controls within which the staff
of the University must operate. Properly complied with, these regulations not only
protect the University but also individual staff. Failure to comply with these
regulations may lead to the loss of assets, significant delays in payments to
employees and suppliers, and additional work for colleagues.
1.2.3
All staff should read these financial regulations and comply with them. If there
are any points which are unclear please contact the Director of Finance & Legal
Services or other contacts within the finance department. If in doubt please seek
advice. Failure to comply with financial regulations is a serious matter and may
lead to action under the University’s disciplinary procedures.
1.2.4
The objectives for each area of the University’s activity, and the key controls that
must be complied with to ensure that the objectives are achieved, are highlighted
in these regulations. It is the responsibility of the Budget Manager to ensure that
detailed written procedures are produced for each separate financial system
within their respective areas of responsibility.
1.2.5
The financial regulations are supplemented by a range of other more detailed
documents on specific subjects including:

The Financial Administration handbook issued and updated by the finance
department;

Any detailed procedures developed by the school or department under
paragraph 1.2.4 to supplement or amplify University procedures;

The University’s Travel and Subsistence Policy, issued and updated by the
finance department;

The Purchasing Protocol, issued and updated by the finance department;

The Insurance Handbook, issued and updated by the finance department;

The Contracts Manual, issued and updated by the Research Services and
Business Development Directorate;

The Procedures on Public Interest Disclosure issued and updated by the
Academic Registry and Student Services Directorate;

The Guidance on Gifts and Hospitality issued and updated by the Human
Resources Directorate;

Instructions issued from time to time by the Director of Finance & Legal
Services.
APPROVAL OF FINANCIAL REGULATIONS
1.3.1
The University’s financial regulations, and any amendments, are subject to
approval by the Board of Governors on the recommendation of the Finance and
Resources Committee and the Vice Chancellor after consultation with the Audit
Committee, the Director of Finance & Legal Services and the Head of Internal
Audit Services.
EXPECTED STANDARDS OF CONDUCT AND PROBITY
1.4.1
All systems and controls depend ultimately on the integrity and competence of the
people who operate them; the University must be able to rely on its staff to act
correctly and conscientiously.
1.4.2
Consequently, it is expected that each person who has entered employment with
the University accepts responsibility for, and wishes to contribute to the
maintenance of the highest possible standards of honesty and integrity in, the
conduct of the University’s affairs. Failure by any individual to live up to such
standards will be regarded as a breach of trust and will be likely to lead to serious
consequences for the individual concerned, including disciplinary action where
appropriate. Any member of staff who is in doubt about how to act in any
situation should seek advice.
1.4.3
No member of the University’s staff has authority to legally or financially commit
the University unless specifically authorised to do so by the relevant Budget
Manager or otherwise under these regulations. Staff should be aware that
financial commitments may arise from any promise or commitment to take action
and no such commitment should be given at any time without appropriate
financial authority. The University may refuse to accept liability where these
regulations have not been followed. If in bypassing these regulations (including
the authorisation and price competition requirements) an order is placed orally or
in writing, payment may be the responsibility of the individual who takes the
action.
1.4.4
The University accepts the reports of the Committee of Standards in Public Life
(“the Nolan Committee”) and in particular the seven key principles of public life:
Selflessness; Integrity; Objectivity; Accountability; Openness; Honesty and
Leadership – further information is set out in Annex A. In all their activities on
behalf of the University, staff should bear these principles in mind when making
decisions with financial consequences. As a good discipline staff should consider
how a third party might interpret their action, and avoid situations where they
appear to have a conflict of interest or may appear to have been influenced in
their decisions by (say) the acceptance of hospitality.
FRAUD AND IRREGULARITY
1.5.1
All members of staff are expected to remain alert to the possibility that the
University may be a victim of fraud, irregularity or other unacceptable activity. If a
member of staff suspects such behaviour they should bring it to the attention of
their head of school or directorate so that they may investigate it more fully.
1.5.2
Following initial consideration of any such allegations, the Head of School or
Directorate is required to bring the issue to the attention of the Director of Finance
& Legal Services without delay, and to agree an approach to investigating the
allegation. While the allegation is under consideration, care must be taken not to
take actions that will render any evidence inadmissible should criminal action be
subsequently deemed appropriate. The Head of Internal Audit Services should
be informed.
1.5.3
The Director of Finance & Legal Services should make recommendations to SMT
on what further legal action should be taken.
1.5.4
If an individual is not satisfied that their complaint has resulted in the appropriate
action they should consider following the procedures set out within the
University’s procedure on Public Interest Disclosures (Whistle-Blowing).
WHISTLE-BLOWING
1.6.1
The University is developing formal procedures to ensure that it complies with
Public Interest Disclosure Act 1998. This enables members of staff who have
concerns that action or inaction within the University raises issues of public
interest can raise these and be confident that the issues will be thoroughly
investigated and all necessary action taken.
1.6.2
Examples of public interest matters include financial malpractice or impropriety or
fraud; failure to comply with a legal obligation or with the Articles of Government
or Regulations of the University; dangers to health and safety or the environment;
criminal activity; academic or professional malpractice; improper conduct or
unethical behaviour; and attempts to conceal any of the above.
1.6.3
Further details of the policy are available from the Clerk to the Board of
Governors.
SCOPE
1.7.1
In the absence of a Board resolution to the contrary, these regulations apply to all
of the activities of the University and its subsidiaries. It is acknowledged that
many grants and projects are given to the University based upon the activities of
particular individuals. This does not mean, however, that different methods and
standards of administration and accountability can apply to these funds.
1.7.2
These regulations do not apply to Oxford Brookes University Students’ Union
(“the Union”) as it is a separately constituted organisation: consequently, the
financial management and control rests with the Union. However, as a condition
of the annual grant that the University provides to the Union, the Board of
Governors expects the principles contained in the Regulations, wherever
relevant, to be adopted by the Union.
KEY CONTACTS
1.8.1
Members of staff with direct responsibility for the University’s activities as noted in
the Financial Regulations and operating as representatives of the Deputy ViceChancellor, Business & Resources are as follows:-
Contact
Director
Responsibility
of
Finance
&
Legal Management of the University’s financial and legal affairs
Services
Deputy Director (Finance)
Taxation, financial & management accounts
Head of Decision Support
Budgetary
control,
costing
activity,
management
information
Insurance & Treasury Officer
Insurances / banking arrangements
Management Accountants
Budgeting, monitoring & costing proposals. Key links with
schools and departments
Purchasing Manager
Purchasing, tendering arrangements for supply
Payments Team Leader
Payments
to
suppliers
and
for
expenses
and
administration of corporate credit and purchasing cards
Income Manager
Income, debt control, student fees, petty cash and cash
office services
Payroll Manager
Payment of salaries and wages
Head of Contracts and Commercial Contract negotiations. Terms and conditions of sale.
Services
Intellectual property rights, patents, etc.
Director of University Relations
Fundraising. Ensuring maximum benefit from donations
Deputy Director (Legal Services)
All contract and legal matters excepting things expressly
delegated
2. CONTROL FRAMEWORK
2.0.1
It is important for all staff to appreciate that all authority to incur expenditure for
University purposes stem exclusively from the Board. For any expenditure it must
be possible to trace the authority back through the University’s framework of
controls to a decision of the Board. This framework includes the Vice-Chancellor
– who carries personal responsibility for the University’s conduct of financial
affairs – the role of SMT and Budget Managers as described in these regulations,
that have also been approved by the Board. The management control systems of
the University are scrutinised through the work of the Board’s Audit Committee
and the Committee reports back to the Board annually on the adequacy of its
arrangements.
2.0.2
Because of the significant amount of public funds which the University receives,
the Higher Education Funding Council of England (HEFCE) carries out certain
regulatory and policing roles in relation to the University. These requirements are
set out in various circulars, but consist principally of the Financial Memorandum,
its annexes and the Audit Code of Practice. The most up-to-date versions of
these documents can be viewed on-line at www.hefce.ac.uk.
2.1 BOARD OF GOVERNORS
2.1.1
The University was incorporated on 21 November 1988 as a Higher Education
Corporation under the Education Reform Act 1988.
2.1.2
Under the provisions of Schedule 12, Paragraph 64(3) of the Act, the University is
established as an exempt charity and does not therefore have to register with the
Charity Commissioners.
2.1.3
The Board of Governors governs the University under its Articles of Government.
The section of the Articles of Government dealing specifically with financial
matters is reproduced as Annex D.
2.1.4
The Financial Memorandum governing the relationship between the HEFCE and
the Board of Governors of the University sets out the financial responsibilities of
the Board of Governors. The Board of Governors is, inter alia, responsible for:a) ensuring that funds from the HEFCE are used only in accordance with the Act,
and any other conditions which the Council may from time to time prescribe;
and
b) designating, subject to acceptance by the HEFCE, a Principal Officer of the
University: the holder of which office will need to satisfy the Governing Body
that all such conditions are complied with.
2.1.5
The Board of Governors has determined that the Vice-Chancellor is the
University’s designated Principal Officer.
2.1.6
The systems of accounting, the accounts and the audit of those accounts must
comply with all statutory requirements, including in particular Schedule 7 of the
Education Reform Act 1988 and any Accounts and Audit Regulations in force
from time to time, including accounts directions issued by HEFCE.
2.1.7
The Board shall establish an Audit Committee, a Finance and Resources
Committee, and a Remuneration Committee, with such terms of reference as
determined from time to time by the Board.
2.2 AUDIT COMMITTEE
2.2.1
The Audit Committee shall meet at least three times a year and taking into
account the audit code of practice issued by HEFCE and other advice and
guidance issued periodically, shall operate within the following terms of reference,
which may be amended by the Board:
a) to advise the Board on the effectiveness of the University’s internal control
systems including the physical security of the computer systems, controls over
access to the systems and controls contained in the software to prevent the
improper use of funds and ensure the quality of information provided by the
system;
b) to advise the Board on criteria for selection and appointment of an internal
audit service (and head of internal audit, if applicable);
c) to consider and advise the Board on a long-term strategy and an annual plan
for the internal audit service;
d) to consider and advise the Board on internal audit reports;
e) to monitor the effectiveness of the internal audit service;
f) to advise the Board on the appointment and remuneration of external auditors
and the scope of their work;
g) to consider and advise the Board on external audit reports and management
letters;
h) to monitor annually, or more frequently if necessary, the implementation of
approved recommendations relating both to internal audit reports and external
audit reports and management letters;
i) to review the annual accounts and accounting policies for submission to the
HEFCE and to present those accounts, with any commentary, to the Board for
approval;
j) to consider whether in its financial dealings the University complies with all
statutory requirements conditions of grants and contracts, and the University’s
Financial Regulations, and to advise the Board of any failure to comply;
k) to be responsible for advising the Board on Value-for-Money issues;
l) to monitor the effectiveness of the external audit service; and
m) to establish objectives for its activities on an annual basis and to review its
own effectiveness.
2.3 REMUNERATION COMMITTEE
2.3.1
The Remuneration Committee shall determine the remuneration, terms and
conditions of service, appraisal arrangements and any severance provision for
senior staff. In addition, it shall review the remuneration of senior staff at least
annually, having regard to all appropriate factors, including:
a)
the views of the senior staff and, if requested by those staff, their
representatives;
b)
the general level of pay rises in the University sector;
c)
comparability with staff in other Universities;
d)
performance in post; and
e)
the need to recruit and retain well-qualified staff.
2.4 FINANCE & RESOURCES COMMITTEE
2.4.1
The Finance & Resources Committee shall, subject to such overall guidance on
strategy as may be given from time to time by the Board:
a)
advise the Vice-Chancellor on a recommendation to the Board for the
coming year’s recurrent and capital budgets, and on the cash flow forecast
and draft balance sheet arising therefrom;
b)
consider for approval by the Board a rolling five-year strategic plan,
including financial plans (both revenue and capital) projected cash flow and
balance sheets, taking account of the requirements of the Funding Councils;
c)
advise the Vice Chancellor on the detail of the five-year financial projections
required by the Funding Council;
d)
recommend an estates strategy to the Board;
e)
review and recommend to the Board borrowing or other financial vehicles
necessary to fund the strategy, and the release of funds for specific
projects;
f)
approve the acquisition or disposal of lands and buildings;
g)
To advise the Board on their consideration of budget monitoring statements
covering recurrent and capital expenditure and cash flow;
h)
To keep under review and advise the Board on changes to the financial
regulations of the University;
i)
To keep under review and approve the University’s policy for investment of
surplus funds, of endowment assets and its subsidiary, joint venture and
other companies;
j)
To review the performance of the University against such indicators and
benchmarks as may be appropriate;
k)
To give advice to the Board as may be required from time to time on the
framework for determining tuition and other fees to be charged by the
University; and
l)
To undertake such other responsibilities as may be delegated by the Board
and to provide such other advice on financial matters as may be required
from time to time by the Board or the Vice-Chancellor.
2.5 VICE CHANCELLOR
2.5.1
The Vice-Chancellor shall:a)
take personal responsibility, which may not be delegated,
proper and effective operation of the controls referred to
Memorandum and for giving effect to the Board’s policies
efficient, economical and effective management of all
resources and expenditure;
b)
be responsible with the Board of Governors for ensuring that any payments
from the Funding Council are used only for the purposes for which they are
given, and in accordance with the provisions of the Financial Memorandum
or such other terms as may be attached;
take responsibility for advising the Board of Governors if at any time any
action or policy under consideration by the Board is incompatible with terms
of the Financial Memorandum. The Vice-Chancellor of the University may
be required to appear before the Public Accounts Committee alongside the
Accounting Officer of the Funding Council, on matters relating to the grant
to the University; and
c)
d)
for ensuring the
in the Financial
for securing the
the University’s
be responsible for preparing annual estimates of income and expenditure,
for consideration by the Board of Governors, and the management of the
budget resources, within the estimates approved by the Board of
Governors. Under the Articles of Government, the Vice-Chancellor has
delegated this responsibility to the Deputy Vice-Chancellor, Business &
Resources.
2.6 DEPUTY VICE CHANCELLOR, BUSINESS & RESOURCES
2.6.1
The Deputy Vice-Chancellor, Business & Resources shall:a)
be the officer responsible for the administration of the financial affairs of the
University. He shall: (i) provide financial advice to the Board of Governors
and its officers; (ii) supervise the implementation of the Board of Governors’
financial policies; (iii) design, implement and supervise financial control
systems; and (iv) prepare and maintain such accounts, estimates, records
and reports as the Board of Governors may require for the purpose of
carrying out its duties;
b)
be responsible for the purchasing policies of the University and ensuring
that those policies are made known to all staff;
c)
require, of any member of staff, that the form in which financial records are
kept shall be to his/her satisfaction;
d)
be responsible for the maintenance of the University’s financial systems of
control, including computing systems; and
e)
ensure that existing and new members of staff are informed of their
responsibilities under these Financial Regulations.
2.7 DIRECTOR OF FINANCE & LEGAL SERVICES
2.7.1 The Director of Finance & Legal services is responsible to the Deputy ViceChancellor, Business & Resources for:
a)
the provision and effective management of financial and legal services to
the University;
b)
the creation and maintenance of adequate systems of internal control within
the University;
c)
the production of the University’s management and financial accounts;
d)
e)
liaison with the external auditors; and
ensuring the provision of effective internal audit services to a plan agreed by
the Audit Committee.
2.8 ALL MEMBERS OF STAFF
2.8.1
All members of staff shall:a)
have a general responsibility for (i) the security of the University’s property,
including confidential information and intellectual property, (ii) avoiding loss
and (iii) due economy in the use of resources. They must comply with the
systems of financial control laid down by the Director of Finance & Legal
Services and with any directions in relation to the control of budgets and the
maintenance of records;
b)
make available any relevant records or information to the Director of
Finance & Legal Services, or authorised representative, in connection with
the carrying out of duties relating to the implementation of the University’s
financial policies and systems of financial control;
c)
provide the Director of Finance & Legal Services with such financial and
other information as may be deemed necessary, from time to time, to carry
out the requirements of the Board;
d)
immediately notify their Budget Manager whenever any matter arises which
involves, or is thought to involve, irregularities concerning, inter alia, cash,
stores, or property of the University. “Property” here includes intellectual
property and any other confidential information which is owned by, or is the
responsibility of, the University. Budget Managers are responsible for
informing the Director of Finance & Legal Services immediately of any such
irregularities, who shall then take such steps as are considered necessary
by way of investigation and report to the Vice-Chancellor and/or Audit
Committee;
e)
notify the Vice-Chancellor of any direct or indirect financial interest they may
have in any organisation with which the University is dealing. Where the
member of staff is dealing with the other organisation on behalf of the
University, the Vice-Chancellor may require that such activity be undertaken
by another member of staff and in any event shall only continue on the
specific written approval of the Vice-Chancellor; and
f)
obtain the approval of the Director of Finance & Legal Services before
initiating computer or manual systems integral to the main financial system
of the University where these systems are to be used for the keeping of
accounting or other records.
8. HOSPITALITY AND GIFTS
Hospitality in this context is defined as refreshments, food or entertainment in excess of
that provided for within the University’s travel and subsistence rules.
8.1 OBJECTIVES
Key Objective: That hospitality given or received is not excessive, taking into account
that: (i) the majority of the University’s funding comes from the public
purse; (ii) the requirements of the Inland Revenue are properly
observed; and (iii) income tax issues are taken into proper account.
8.2 RECEIPT OF HOSPITALITY AND GIFTS
8.2.1
A member of staff should not accept gifts or hospitality that may give rise to the
suspicion that they may have a conflict of interest or have been influenced in any
decision. Staff dealing with providers of supplies or services should be
particularly careful. More detailed guidance has been developed by the
Directorate of Human Resources.
8.2.2
Where it would be inappropriate to decline a gift, it may be accepted on behalf of
the University and given to a school or department, or the individual could
‘purchase’ the gift by making a charitable donation of the value.
8.3 EXPENDITURE ON HOSPITALITY AND GIFTS
8.3.1
In giving hospitality or gifts it is necessary for staff to take account of Inland
Revenue rules and detailed instructions on compliance issued by the Director of
Finance & Legal Services.
8.3.2
In addition, authorisation is required before incurring such expenditure as follows:
a) members of staff other than those listed below require the approval of their
Budget Manager before incurring expenditure;
b) Delegated representatives of a Budget Manager require the approval of their
Budget Manager before incurring expenditure in excess of £100;
c) Budget Managers require the approval of the appropriate member of the SMT
before incurring expenditure in excess of £300;
d) SMT members other than the Vice-Chancellor require the approval of the
Vice-Chancellor before incurring expenditure in excess of £300; and
e) the Vice-Chancellor requires the approval of the Chair or Vice-Chair of
Governors before incurring expenditure in excess of £1,000.
ANNEX A: SEVEN PRINCIPLES OF PUBLIC LIFE
Abstracted from the Nolan Committee report
Selflessness
Holders of public office should take decisions solely in terms of the public interest. They
should not do so in order to gain financial or other material benefits for themselves, their
family, or their friends.
Integrity
Holders of public office should not place themselves under any financial or other
obligation to outside individuals or organisations that might influence them in the
performance of their official duties.
Objectivity
In carrying out public business, including making public appointments, awarding
contracts or recommending individuals for rewards and benefits, holders of public office
should make choices on merit.
Accountability
Holders of public office are accountable for their decisions and actions to the public and
must submit themselves to whatever scrutiny is appropriate to their office.
Openness
Holders of public office should be as open as possible about all the decisions and actions
that they take. They should give reasons for their decisions and restrict information only
when the wider public interest clearly demands.
Honesty
Holders of public office have a duty to declare any private interests relating to their public
duties and to take steps to resolve any conflicts arising in a way that protects the public
interest.
Leadership
Holders of public office should promote and support these principles by leadership and
example.