06/01 - September

Dear Colleagues

2005/06 HESA Finance Statistics Return (Ref.: C05031)

This Circular contains links to documents and further guidance that are required for the C05031 Finance Statistics Return (FSR) data collection. Institutions are therefore requested to review the information contained in the following documents:

Timescales for the collection

The timescales for the 2005/06 Finance Statistics Return can be found here: Timescales for the 2005/06 Finance Statistics Return.

Report detailing the FSR changes from 2004/05 to 2005/06

A report on the changes to this year’s template can be found here: Report detailing the FSR changes from 2004/05 to 2005/06.

The main changes to the FSR in 2005/06 are as follows:

1. FRS 17 (retirement benefits)

Institutions will need to include the full impact of FRS 17 (retirement benefits) in the 2005/06 HESA FSR, providing figures for the financial year ending 31 July 2006 and comparative figures for the year ending 31 July 2005.

Institutions are expected to follow the guidance issued by the BUFDG in July 2005 (http://www.bufdg.ac.uk/private/groups/ASG_FRS17_July2005.doc) in relation to implementing FRS 17.

The changes to the HESA FSR tables and guidance notes to accommodate FRS 17 are as follows:

Changes to table layout:

• Table 2 Head 10 (Pension asset/(liability)) requires a direct entry to include the total pension asset/(liability) as defined by FRS 17. A total pension liability (deficit) should be entered as a negative value.
• Table 2 Head 14 (Reserves) Sub-head iii (General reserve) has been split into two further Sub-heads: a General reserve excluding pension asset/(liability); and b Pension reserve. Direct entry is required.

Changes to guidance notes:

• The expected return on pension scheme assets and the interest on pension scheme liabilities should be netted off, and the net figure included within endowment and investment income (Table 5b Head 5), if a net credit, or within interest payable (Table 6 Head 7 Column 6), if a net debit.
• Current and past service costs should be returned under staff costs in the HEI’s income and expenditure account. However, for the purposes of the FSR return the actual pension costs for any scheme treated as a defined benefit scheme under FRS 17 should be analysed out by department (as last year) but any FRS 17 adjustment made to staff costs in the income and expenditure account (i.e. difference between actual contributions made and current service cost figure) should be included in Table 6, against Sub-head 3.54a, rather than against departments - pro-rata between academic and other staff costs.

2. Joint Venture Companies and Associated Companies (JVCs and ACs)

For the purpose of the HESA FSR joint ventures should be included under the gross equity accounting method of FRS 9 on a line-by-line basis:

• Table 1 Income Heads 1 to 5 should show the gross position for the institution, i.e. should include income attributable to a share in joint venture(s).
• Table 1 Head 7 (Less: share of income in joint venture(s)) requires a direct entry to deduct the share of income from joint venture(s). It must be a negative figure or zero.
• Table 1 Head 15 (Share of surplus/(deficit) in joint venture(s) and associates) requires a direct entry to record the share of surplus/(deficit) in any joint venture(s) and/or associate companies.

Also, net assets (i.e. gross assets less gross liabilities) of investments in joint ventures and/or associate companies should be included in investments within fixed assets (Table 2 Sub-head 1aiii).

3. Full Economic Costing (fEC)

The implementation of full economic costing (fEC) should not have any impact on the way in which institutions account for research income in their financial statements. fEC is a methodology by which a price is calculated and the only result is that the price, and hence income, should increase: the category of income remains the same, i.e. research grants and contracts. The costs of institutions' activities remain as they would otherwise have been. On the face of the income and expenditure account the categories of staff costs, other operating expenses, depreciation and interest payable remain the same; for those institutions that have disclosed the direct costs of research in the notes to the accounts the same treatment is also appropriate.

Institutions should therefore note that there is no change to the guidance for reporting of research income in Table 4 or expenditure in Table 6.

Coding Manual

The Coding Manual for use in making the 2005/06 FSR available is available here: 2005/06 FSR Coding Manual.

Template

The template for use in making the 2005/06 FSR is here: 2005/06 FSR template.

Please note that data must be returned to HESA on the template provided.

Data Quality

Institutions are asked to pay particular attention to the data quality reports (check documentation) produced and the queries raised during data collection, and also to endeavour to resubmit data in order to resolve quality issues where they arise.

The following specific checks are undertaken as part of the verification procedure:

1. Published accounts

HESA will be checking for consistency between the FSR and the published accounts.

2. Electronic accounts returned to HEFCE

For those institutions in England and Northern Ireland that return electronic financial statements to HEFCE, HESA will be checking for consistency between the FSR, the published accounts and the electronic financial statements.

Colleagues responsible for completing the FSR should therefore refer to these electronic financial statements before submitting data to HESA. (Please note that the electronic financial statements are an extract of information from the accounts).

3. Cost centres

HESA will also be checking for the consistent use of cost centres across all data streams, and as such, the distribution of student FTE, staff FTE, expenditure and research income by cost centre will be checked. The valid list of cost centres for the FSR can be found here: List of valid cost centres.

4. Summary statistics

The check documentation includes a series of summary statistics taken from Tables 1, 2 and 3 for institutions to verify.

5. Year-on-year checks

The check documentation also includes previous and current year comparative checks (using a combination of absolute values and ratios) in the cells of tables as follows:

1. Table 1 - Heads 1 to 13
2. Table 4 - All heads from column 9
3. Table 5a - All heads
4. Table 5b - All heads
5. Table 6 - All heads from columns 1, 2, 4 and 6.

Access codes

Access codes will be issued to the record contact (and only the record contact) when the data collection system opens in early December.

Who to contact

If you have any queries on the issues raised in this Circular, please contact the Institutional Liaison team at HESA, or email us at liaison@hesa.ac.uk.

Yours sincerely

C. Jane Wild

Director of Operations