05/01 - November

Dear Colleagues

2004/05 HESA Finance Statistics Return (Ref C04031)

Following record review and sector consultation, notification of the replacement record for the Finance Statistics Return (FSR) 2004/05 was given in Finance Circular 04/02 issued June 2004.

A summary of the changes to the FSR for first implementation in 2004/05 is contained within Annex B of Finance Circular 04/02. Furthermore, a list of the agreed cost centre changes is included in Annex C.

This Circular contains links to documents and further guidance that are required for the C04031 FSR data collection. Institutions are therefore requested to review the information contained in the following documents:

Timescales for the Collection

The timescales for the 2004/05 Finance Statistics Return can be found at: index.php?option=com_content&task=view&id=303&Itemid=233

Coding Manual

The Coding Manual for use in making the 2004/05 FSR available is available at: index.php?option=com_content&task=view&id=301&Itemid=233

Template

The template for use in making the 2004/05 FSR is at: index.php?option=com_content&task=view&id=156&Itemid=233. Data must be returnd to HESA on the template provided.

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.

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 to endeavour to resubmit data in order to resolve quality issues where they arise.

The following specific checks will be undertaken by HESA 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 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.

A summary of the changes made to the cost centres can be found at: http://www.hesa.ac.uk/manuals/CCtable.html.

From 2004/05 institutions must use the new shorter list of cost centres resulting from the changes in listed in above summary. The valid list of cost centres for the FSR therefore includes: 01-08, 10-14, 16-21, 23-31, 33-35, 37-38, 41, 51, 54a, 54b, 55, 56 and 57.

4. Summary Statistics

The check documentation includes a series of summary statistics, e.g. the HEMS financial ratios 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 5 and Heads 7 to 10
2. Table 4 - All heads for column 9
3. Table 5a - All heads
4. Table 5b - All heads
5. Table 6 - All heads for columns 1, 2, 4 and 6.

Further Guidance

1. Full Economic Costing

The Research Councils announced that £141 million will be paid out to institutions during 2005 as the total amount of transitional funding for the introduction of full economic costing. Within this total, £120 million covers the period April 2005 to March 2006, and £21 million covers the period April 2006 to March 2007. Following discussions with BUFDG and SCOPFOG, it has been agreed that institutions should account for their allocation of this funding on a time-apportioned basis. This means that one third of the additional funding is accounted for in 2004/05 and the remainder in 2005/06. This guidance also applies to institutions’ 2004/05 financial statements and the 2004/05 HESA FSR.

The additional income should be reported under OST RG&C and not as Funding Council grant (for research). It should be apportioned across the FSR cost centres in the same proportions that the HEI held grants in the reference year 2003/04 (i.e. the year that was used to calculate HEIs' proportionate entitlement to the £141M. In any case, the FSR should be completed so it is consistent with the institution’s financial statements. Institutions should also note that there are no changes to the guidance for reporting of research income or expenditure in Table 6 of the FSR.

2. Joint Venture Companies (JVC) and Associate Companies (AC)

Institutions show the consolidated results for the group in their published financial statements, which will include the results of JVCs and ACs. For the purpose of the FSR, BUFDG advise that the results of the JVCs and ACs are consolidated and there is no need for separate reporting.

3. Table 1 Income and Expenditure Account - Exceptional Staff Costs

In Table 1 of the FSR (the I&E account) exceptional items should be included under Head 13 ‘Exceptional items’ only where they meet the definition of exceptional items set out in Financial Reporting Standard (FRS) 3 - Reporting Financial Performance. FRS 3 requires the separate disclosure of:

• Profits or losses on the sale or termination of an operation


• Costs of fundamental reorganisation or restructuring


• Profits or losses on the sale of fixed assets.

Institutions should not re-classify their restructuring costs (returned under a sub-head of staff costs in the audited accounts) as Exceptional items (Head 13) in the FSR, but should return them within Staff costs (Head 7). For the 2005/06 FSR, HESA will add a new sub-head for "exceptional staff costs" under Staff costs.

4. Table 6 Expenditure by Activity - Head 3 Administration and central services

The guidance on Table 6 sub-heads 3.54a Central administration and services, 3.54b General educational expenditure and 3.55 Staff and student facilities offers lists of examples of the type of costs to be incurred under these sub-heads. The lists have evolved from queries raised by institutions over the years and are by no means exhaustive.

Who to Contact During Data Collection

Institutions should consider Institutional Liaison as a general first point of contact for any HESA issue.

If you have any queries on the issues raised in this Circular, please contact the Institutional Liaison team (Alison Berry, Marietta Nkweta, Janet Earl, Clara Elcocks and Helen Skitt) at HESA, or email (liaison@hesa.ac.uk).

Yours sincerely

C. Jane Wild
Director of Operations