Section 3: Financial Management


3.01 Accounting Periods
3.02 Budgetary Process
3.03 Financial Statements
3.04 Treasury Management
3.05 Taxation
3.06 Records and Retention

 



3.01 Accounting Periods
The University’s financial year runs from 1st August until 31st July of the following year. The Finance Office prepares monthly management accounts and other management reports throughout the year for use by Senior Management Group, Schools, Research Institute or Administrative Services as appropriate.

 

3.02 Budgetary Process
The University prepares a rolling three year financial forecast each financial year. The preparation of this financial forecast is overseen by the Vice Principal of Strategy and Resources and the Director of Finance. In preparation for this, each College and University Services prepares a strategic planning document and associated financial forecast information. The planning documents are reviewed in a series of meetings involving the Principal, Heads of College and other senior College staff members, Secretary of Court, Senior Vice Principal, Vice Principal of Strategy and Resources, Vice Principal of Research and Enterprise, Vice Principal of Learning and Teaching, Director of Finance and other senior Finance Office staff members, and the Head of Planning Services. The final draft of the financial forecast is reviewed by Finance Committee and is approved by University Court. The final approved budget is submitted to the Scottish Funding Council for reference.

The approved budget is then delegated to the relevant Senior Management Group Member who is accountable for the delivery of the income and expenditure account contained within the approved budget. The Senior Management Group Member must ensure that effective day to day monitoring is in place to identify any potential deviances from budget in a timely manner and that appropriate corrective action is taken. Significant departures from budget should be reported to the Finance Office immediately.

The Director of Finance is responsible for providing appropriate management information to Senior Management Group and Finance Committee to allow a cohesive approach to be taken to any financial risks or opportunities which present themselves throughout each financial year.

3.03 Financial Statements
The University prepares a set of consolidated financial statements on an annual basis. The financial statements are prepared under the historic cost convention, modified to include listed investments at their market value, to incorporate certain land and buildings at a revalued amount and in accordance with both the Statement of Recommended Practice (SORP): Accounting for Further and Higher Education, and applicable Accounting Standards. The financial statements also conform to guidance published by the Scottish Funding Council.

The consolidated financial statements are subject to audit by the University's appointed external auditors. The draft statements are reviewed by Audit Committee and Finance Committee before approval by University Court.


3.04 Treasury Management
The Finance Committee is responsible for approving a treasury management policy for cash management, long term investments and borrowings. This will require compliance with any relevant covenants contained within the Financial Memorandum as agreed with the Scottish Funding Council. The day to day operations in relation to treasury management are delegated to the Finance Office. The Director of Finance will report to the Finance Committee on the activities of the treasury management operation and on the exercise of the powers delegated to the Finance Office.

The non endowment cash balances of the University can be invested in temporary cash deposits with the major UK clearing banks, building societies and UK registered money market funds up to a maximum of thirty five million pounds with any one institution. The institution must be rated at a minimum of BBB+ (as per Standard and Poor's long term rate) with money market funds at a minimum of A+ rated. Banks with stronger ratings or quasi nationalised will be utilised first.  This is for a maximum of three months per deposit. University Court is responsible for the appointment of the University’s bankers and other professional financial advisors (such as investment managers) on the recommendation of the Finance Committee.  In appointing bankers or other professional advisors, the University tendering processes must be followed (see Section 5.03).

Only the Finance Committee may authorise the opening or closing of a University bank account. No staff member (other than the Director of Finance operating on the authority of the Finance Committee), may open or operate bank accounts to deal with funds held by or due to the University Court. All cheques drawn, and all automated transfers on behalf of the University, such as BACS or CHAPS, must be authorised in accordance with the prevailing bank mandate approved by University Court on an annual basis. No standing orders should be set up against any University bank account.

The Director of Finance is responsible for ensuring that all bank accounts are subject to regular reconciliation and that large or unusual items are investigated as appropriate.

3.05 Taxation
The Director of Finance is responsible for advising on all taxation issues within the University, in the light of guidance issued by the appropriate bodies and relevant legislation as it applies. This includes VAT, PAYE, National Insurance, corporation tax and import duty. The Director of Finance is responsible for making all tax payments and submitting tax returns by their due date as appropriate.

3.06 Records and Retention
The University is required by law to retain prime documents for seven complete tax years (April to March). Additionally, for auditing and other purposes, other financial documents should be retained for three years or as determined by the funder. Further guidance on records and retention can be obtained from the Records and Information Management website.