Finance

Heads of Department financial responsibilities

- as budget controller the HoD should maintain an overview of:

• Staffing budgets (ensuring that the MSL forms are up to date and in balance);
   
• Non-staffing budgets such as allocations for stationery and printing (set annually by the Academic Planning and Resources Committee (APRC) by formula);
   
• Purchasing – Note that the School’s purchasing regulations for goods over £5k require that a tendering process to be followed. You are advised to consult with your Departmental Manager who should be familiar with the process;
   
• Student fees – Fee collection is handled by the Finance division and we follow a fee collection timetable that is agreed each year with the Academic Registrar’s and the Students’ Union. It sets out the timetable for collection and the sanctions for non-payment. It is always our intention, at the earliest opportunity to establish dialogue with any student that is having difficulty paying in order to identify ways of ensuring they can continue their studies and meet their financial obligations.
   
• Departmental endowments/trusts (eg: for prizes etc)

Heads of Department’s financial responsibility as a budget controller or budget holder

Heads of Department are likely to be budget controller for a range of departmental accounts. As budget controller they are responsible to the Director of Finance & Facilities and the Finance & General Purposes Committee for the management of budgets within their control. For most budgets this responsibility is operationally discharged by a budget holder. Liz Bunting, in the Finance Division can provide a list of department budgets and their current authorised budget holders and controllers

Budget holders are members of staff who are responsible with their staff for the day-to-day management of the budgets they hold. They will be responsible to their budget controller (normally head of division/department) for the management of that budget.

They will normally be personally responsible for authorising expenditure against the budget (although authority may be delegated with the Director of the Finance Division’s approval). A budget controller can set an upper limit on the level of authorisation that the holder can exercise.
Budget holders are responsible to their budget controller for undertaking the following:

1. monitor expenditure and maintain records of outstanding purchase orders and known future items of unavoidable expenditure to ensure that the total budget for the year is not exceeded, and to notify their budget controller and the Director of the Finance Division of both actual and potential negative and positive variances as soon as information becomes available;
    
2. budget holders who are responsible for income budgets are also required to monitor activity against that budget, and to notify their budget controller and the Director of the Finance Division of both actual and potential negative and positive variances as soon as information becomes available;
    
3. on request, provide information to the Director of the Finance Division on the most likely outturn for the year (on both income and expenditure budgets) to assist the preparation of accurate financial forecasts;
    
4. report as soon as possible to their budget controller and the Director of the Finance Division if it is foreseen that the budget for the year (either expenditure or income) will be subject to a variance of +/- £5,000;
    
5. ensure that purchasing and tendering procedures are carried out in accordance with the financial regulations;
    
6. when purchasing goods or services costing £8,000 or more you should specific the requirements in the form of a tender specification and obtain at least 3 written quotes;
    
7. monitor performance of suppliers and advise on alternatives where appropriate costs reductions/efficiency gains can be made;
    
8. monitor pay commitments against the MSL2 forms that control staffing budgets;

At the year end unspent budgets are not normally carried forward unless the Director of the Finance Division has approved a specific scheme for carrying forward all or part of the unspent amounts. Approval for carry forward will require detailed plans for the proposed use of the balances.

NOTE: Unspent balances on MSL’s and departmental outside funds are automatically carried forward.

Financial responsibility as a Heads of Department:

1. provide a financial statement to all members of the department for information at a departmental meeting at the beginning of each academic year, accounting for expenditure in the previous financial year of the financial resources available to the department, including the minimum staffing level (MSL) allocation and outside funds accounts;
    
2. provide information to all members of the department about resources available to the department in the current financial year, eligibility to apply, and the basis of distribution of such resources.

Financial regulations and legislative framework:

The School’s financial regulations are available on the Finance Division website and hard copies can be obtained from the Cecelia Okereke in the Finance Division. Heads of Department need to familiarise themselves with its contents and ensure that an adequate number of copies are available for reference within their department.

Sections that are particularly relevant include

• A : Status of financial regulations
• C2 : Financial control
• C5.3 Banking arrangements
• C10 Expenditure
• C11 Purchasing
• C13 Salaries, wages and staff benefits
• C14.5 Security
• Procedure PR2 dealing with breaches of the Financial Regulations
• Procedure PR3 dealing with cash handling
• Procedure PR7 dealing with purchasing
• School Policy SP2: dealing with travel, subsistence and hospitality
• School Policy SP4: dealing with departmental outside funds

The School operates within a legislative framework provided by the following:

• financial memorandum with the Higher Education Funding Council for England (HEFCE);
• Companies Act;
• Charities Act;
• Tax regulation.

Accountability: chain is as follows:

• Council and Court of Governors
• Finance and General Purposes Committee (ensures control procedures are in place and that available money is appropriately spent)
• Academic Planning and Resources Committee (has clear oversight of financial position)
• Audit committee
• Chairman of Finance and General Purposes Committee (F&GPC)
• Director of the School
• Secretary and Director of Administration
• Director of Finance and Facilities
• Director of the Finance Division
• Budget controllers (responsible for local spending)
• Budget holders (able to “sign off” on small scale expenditure)

Key contacts in Finance

We are always happy to provide new Heads of Department with one to one guidance on the use of Aptos, management of their department budgets, carry forward balances, or MSLs. Please contact Liz Bunting to schedule a convenient appointment. Existing department heads and department managers and their staff are also welcome to make use of this service

We would strongly recommend that new heads of department take the time to do this.

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