Section 3: Financial Management

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 and Administrative Services as appropriate

3.02 Budgetary Process

Preparation of the budget

The University prepares a rolling five year financial forecast each financial year. The preparation of this financial forecast is overseen by the Senior Vice Principal / Deputy Vice Chancellor (Academic) and the Executive Director of Finance.

  • 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 / Deputy Vice Chancellor (Academic), Director of Strategic Planning / Deputy Chief Operating Officer / Vice Principal – Economic Development and Innovation, Assistant Vice-Principal (Strategy & Resources), Executive Director of Finance and other senior Finance Office staff members, and the Head of Planning Services and other members of the Planning, Insight and Analytics Team.
  • 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 SFC for reference.


Monitoring the budget


The approved budget is then delegated to the relevant SMG Member who is accountable for the delivery of the income and expenditure account contained within the approved budget. The SMG Member must ensure that effective day to day monitoring is in place to identify any potential variances from budget in a timely manner and to ensure that appropriate corrective action is taken in a timely manner.

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


Project budget holders


SMG members delegate budgetary responsibility for individual projects to budget holders. The budget holder is responsible for ensuring the project is managed within the approved budget.

3.03 Financial Statements

The University prepares a set of consolidated financial statements on an annual basis. The financial statements are prepared in accordance with FRS 102, the Statement of Recommended Practice (SORP): Accounting for Further and Higher Education and guidance published by the SFC.  The University’s principal accounting policies are set out in the notes to the financial statements and are in accordance with these Financial Regulations.  As a charity, the University is required by trust law to apply fund accounting.  This distinguishes between two primary classes of fund: those that are unrestricted in their use, which can be used for any charitable purposes of the University, and those that are restricted in use, which can only be lawfully used for a specific charitable purpose.  Further information about the University’s funds is included at 4.06 Charitable Donations and Endowments Funds and 7.04 Endowment Assets.


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


The University also is required to prepare US GAAP financial statements annually, which must be submitted to the U.S. Department of Education.


In accordance with Companies Act 2006 requirements, separate financial statements are also prepared and filed for the University’s subsidiaries.  These are prepared in accordance with FRS 102 and approved by the relevant Board of Directors.

3.04 Audit arrangements

University Court has established an Audit & Risk Committee (“ARC”) whose remit is to oversee the arrangements for external and internal audit of the University’s financial and management systems and of activities and processes related to these systems.

The primary role of the external audit service is to report on the University’s financial statements and to carry out such examination of the statements and underlying records and control systems as is necessary to reach an opinion on the statements and to report on the appropriate use of funds.  The external auditor’s duties will be in accordance with advice set out in the SFC’s Financial Memorandum and the Financial Reporting Council’s (“FRC”) auditing standards.

The primary role of the internal audit service is to provide the ARC and University Court with assurances on the adequacy of the University’s internal control system. The internal auditor’s duties will be in accordance with advice set out in the SFC’s Financial Memorandum, the FRC’s auditing standards, and the Chartered Institute for Internal Auditors Internal Audit Code of Practice.

Both the Internal and External audit services are independent in their planning and operation and have unrestricted access to all records, assets, personnel and premises as required to perform their duties.

The University may, from time to time, be subject to audit by other external agencies such as the European Court of Auditors and HMRC.  They have at least the same rights of access as external and internal auditors.

The ARC is responsible for approving a Non-Audit Services Policy which sets out the circumstances in which the University’s internal and external auditors may conduct other non-audit services.  The internal and external auditors may only be permitted to provide other services to the University in accordance with this policy.

3.05 Taxation

The Executive Director of Finance is responsible for ensuring policies and procedures are in place for maintaining the University’s tax records, making all tax payments, and submitting tax returns by their due date as appropriate.  He/she is responsible for publishing the University’s Tax Strategy annually, as approved by the Finance Committee.  Day to day handling of taxation is delegated to the Tax, Treasury and Reporting Manager, Head of Pay and Pensions, and Tax Manager

3.06 Records and Retention

The University is required by law to retain prime documents for six years plus the current financial year (6+1). 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 Data Protection and Freedom of Information Office website.

3.07 Accounting Systems

All members of staff with access to the University finance system must comply with the rules laid down by IT Services. These can be accessed at the IT Services website.

In order to access the University finance system, staff members are required to attend the required training, information about which can be found on the Finance: Systems website.  The Finance Systems team put in place processes for the approval of new users and the removal of leavers.

All financial transactions should be properly recorded within the University’s finance system either through direct input or through an appropriate interface from another University approved system platform.

Where an individual’s personal data is recorded within the University’s financial system or within any other approved University system that deals with financial transactions, all staff members working with that data must ensure that working practices comply with the Data Protection Act 2018. Advice on these matters may be obtained from the University’s Data Protection and Freedom of Information website.