The responsibilities of the governing body as they relate to financial matters, typically include:
While the governing body has the collective and ultimate responsibility for ensuring the financial health of the institution, in some (but by no means all) institutions the detailed work on finance is delegated to a Finance (and/or Resources) Committee, which reports to the full governing body.
For further information on finance go to Governors' briefing note No.18: Finance
The Getting to Grips with Finance provides a useful introduction and overview to the topic of finance.
For accounting periods starting after 1 January 2015, higher education institutions (HEIs) are required to adopt FRS 102, the new reporting standard for the United Kingdom (UK). Alongside FRS 102 a new Statement of Recommended Practice (SORP) 2015 has been approved by the Financial Reporting Council. The recommendations of the SORP are applicable to all further and HEIs in the UK.
The SORP does not diverge from FRS 102, but offers an interpretation to aid the practical implementation of FRS 102 by HEIs.
A summary statement of the changes resulting from FRS 102 and the new SORP for FEHE is available here. For example, the terminology used to describe the primary financial statements of a HEI will change. The new primary statements will include the statement of comprehensive income (SOCI), statement of financial position (ie. balance sheet) and cash flow statement.
Model financial statements for SORP 2015, developed by the British Universities Finance Directors Group (BUFDG), are available for download.
HEFCE collects and collates data from English HEIs and publishes financial outcome and forecasts for the the sector.
Some of the challenges facing institutions in the sector as the result of a changing operating environment and comparative data about the financial health of institutions is explored in following presentation.
- Andrew McConnell, Director of Finance, University of Huddersfield
The Financial Sustainability Strategic Group's report, 'mind the gap - understanding the financial sustainability challenge', examines the question of financial sustainability and highlights the risk that institutions may experience a sustainability gap.