FSR Table 7 - Expenditure by activity

HESA FSR with HE-BCI Survey collection 2010/11

General guidance on Table 7: Expenditure by activity

Version 1.0 Produced 2011-07-29

1. Table 7 provides a further analysis of the four main expenditure headings in Table 1. The totals for each of the main expenditure headings must be the same as those in the financial statements.

2. Under the implementation of fEC 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 of tangible assets and interest and other finance costs 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 here. Institutions should therefore note that there is no change to the guidance for reporting of research expenditure.

3. Costs should be returned in the appropriate column. The columns are:

Staff (column 1-3)

4. Staff costs should cover all staff for whom the institution is liable to pay Class 1 National Insurance contributions and/or who have a contract of employment with the institution. This should include any redundancy or restructuring payments (where they are not treated as exceptional items), which should be returned under Head 7. The pay of departmental administrators and of other non-teaching staff employed in academic departments should be included under Head 1; where they are shared between a number of departments, the cost should be allocated on a basis that equates to the effort input to each department. Payments to non-contracted staff or individuals should be included in other operating expenses (Column 4).

5. In accordance with FRS 17 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 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 against Head 7 (Other expenditure) rather than against departments - pro-rata between academic and other staff costs. Pension cost adjustments should be returned under Head 7, rather than sub-head 3b. Costs such as maternity pay and sick pay should be treated as normal staff costs, and allocated under the appropriate cost centre.

Column 1 (Academic)

6. Under Column 1 Head 1 should be included costs in respect of academic professionals, paid from within the budgets of academic departments and allocated to the appropriate cost centre. The costs of academic staff in non-academic departments should be included under Heads 2 to 7, as appropriate.

Academic professionals (Standard Occupational Classification Group 2A) are those staff responsible for planning, directing and undertaking academic teaching and research within HEIs. All academic staff are classified to this group regardless of their discipline (e.g. science, engineering, social sciences, humanities, languages). This group should also include medical practitioners, dentists, veterinarians and other health care professionals who undertake lecturing or research activities within HEIs. Workers in this group fall under one of the following categories:

2A(I) Vice-Chancellors, Deans and Academic Directors
2A(II) Lecturers, Tutors and Teaching Assistants
2A(II) Researchers.

Column 2 (Other)

7. Under Column 2 Head 1 should be included the costs of all other staff paid from within the budgets of academic departments and allocated to the appropriate cost centre. The costs of other staff in non-academic departments should be included under Heads 2 to 7, as appropriate.

Column 3 (Total staff)

8. This is the total of Columns 1 and 2 and is automatically calculated.

Column 4 (Other operating expenses)

9. Other operating expenses should be allocated to academic department cost centres under Column 4 Head 1 or to the non-departmental Heads according to where these costs are incurred. The costs included should be all other non-staff costs incurred (except for depreciation of tangible fixed assets and interest and other finance costs, which are shown separately). Equipment that has not been capitalised should be recorded under this column against the appropriate cost centre. Also expenditure on maintenance contracts should be included under this column. Where costs that occur centrally are charged to departments, e.g. telephone costs, they should be included in academic departmental expenditure under the appropriate cost centre. If not split by cost centre, the total should be included under Column 4 Head 3a (Central administration & services). Other operating expenses on residential, catering and conference operations should be shown against Column 4 Head 5.

Column 5 (Depreciation of tangible fixed assets)

10. Depreciation on capitalised equipment should be recorded according to where the assets being depreciated are located:

• Head 1 Academic departments
• Head 2 Total academic services
• Head 3 Administration & central services
• Head 6 Research grants and contracts
• Head 7 Other expenditure.

It is not necessary to apportion the depreciation for 'central' equipment over the cost centres.

11. Depreciation on buildings used other than for residential, catering and conference operations should be recorded under Sub-head 4b (Other expenditure). This Sub-head should include depreciation relating to embedded accommodation in hospitals involving clinical and pre-clinical departments.

12. Depreciation on all assets employed on residential, catering and conference operations should be shown against Head 5 (Total residences and catering operations (including conferences)).

13. Depreciation which cannot be allocated to any of the Heads above should be recorded under Head 7 (Other expenditure).

Column 6 (Interest and other finance costs)

14. Interest and other finance costs should be recorded under one of three Heads:

• Sub-head 4b Premises - Other expenditure
• Head 5 Total residences and catering operations (including conferences)
• Head 7 Other expenditure.

Column 7 (Total expenditure)

15. This is the total of Columns 3, 4, 5 and 6 and is automatically calculated.

Head 1: Academic departments

16. This Head should cover all expenditure directly incurred by or on behalf of academic departments, including departments of Continuing Education, and expenditure incurred in connection with special and short courses, which is not reimbursable by Research Councils or other bodies in respect of work carried out on their behalf.

17. Sub-heads 01 to 38 refer to departmental cost centres providing postgraduate, undergraduate and any further education award or credit bearing courses. Where these departments also run Continuing Education courses, expenditure on these courses should be attributed to the parent departmental cost centre rather than the Continuing Education cost centre (41).

18. Sub-head 41 should cover expenditure on Continuing Education courses, which are run by separate Departments of Continuing Education or Extra-Mural Studies.

19. Head 1 should cover, inter alia:

a. Payment to other institutions in respect of the teaching of students who are principally registered at the reporting institution (for example, if some of the teaching of a course is "sub-contracted" to another institution, or if a "franchising" arrangement involves such payments).

b. Expenditure from Research Council grants in respect of Doctoral Training Grants and Collaborative Training Accounts (or similar postgraduate grants) for the training of postgraduate research students, including bench fees and Collaborative Awards in Science and Engineering (CASE) awards.

c. The cost of departmental museums and observatories which are housed in a teaching department.

d. Expenditure on departmental computers and that incurred by departments for the use of computers outside the institution.

e. Expenditure on animal houses and similar units associated with particular departments, if necessary with apportionment between department groups concerned.

20. Head 1 should not include:

a. Expenditure on departmental libraries, which should appear instead under Head 2 (Total academic services).

b. Expenditure on conferences, although organised by academic departments, should appear under Head 5 (Total residences and catering operations (including conferences)).

Head 2: Total academic services

21. This Head should show expenditure incurred on centralised academic services such as the library, learning resource centres, central computers, etc. All expenditure on all libraries and learning resource centres (central and departmental) should be included here. Also expenditure on binderies; audio-visual aids; television; slide and tape production; e-learning production; photography; language centres etc.

22. This Head should also show gross recurrent expenditure (including that from Joint Information Systems Committee (JISC) grants) in respect of central non-administrative non-library institutional computers. It should exclude direct costs of central computer services for outside bodies. It should include maintenance costs, operating costs, materials costs and the pay of staff involved in managing and running the installation(s), but exclude the pay of staff involved in the teaching and research of academic subjects such as computer science.

23. Recurrent expenditure on departmental computers or by departments on computers in other institutions should not be covered by this Head, but instead should be included under Head 1. The running costs of administrative computers and charges for the administrative use of a central computer should be shown under Sub-head 3a.

24. This Head should also cover expenditure on museums, galleries and observatories, except those run by academic departments and included in Head 1; expenditure on any other general academic services not covered above, e.g. radiation protection, international liaison office and industrial liaison. If teaching is carried out by an academic services unit these teaching activities should not be included under this Head but should be included under the appropriate academic department under Head 1.

Head 3: Administration & central services

25. This Head should include expenditure incurred on central administration, staff and student facilities and amenities, and general educational expenditure. It should not include the cost of departmental administration which should be covered by Head 1, nor expenditure on premises, including estates maintenance and administrative staff, which should be shown under Head 4.

Sub-head 3a (Central administration & services)

26. Should include the costs of central administrative staff, and such payments to Heads of Institutions, Professors, Deans, Tutors, Faculty Officers and the like, as are made in respect of central (as distinct from departmental) administrative work.

27. The running costs of an administrative computer should be shown under this Head, as should the charges for the administrative use of a central computer.

28. This Sub-head should include costs associated with the following, unless charged to the relevant cost centre:

a. Public relations

b. Advertising of and recruitment to all vacancies

c. Removal expenses of all staff

d. Publications, excluding educational publications

e. Rating or council tax advisers

f. Security of wages

g. Bank charges, excluding interest (which should be shown under Head 7)

h. Calendar, prospectuses, regulations etc.

i. General advertising

j. Other costs of faculty offices in respect of central administrative work

k. Legal and audit fees

l. Internal audit

m. Superannuation management (including where outsourced)

n. Postage where centrally charged

o. Expenses of Head of Institution

p. General insurance costs not included elsewhere

q. Telephone costs (calls, rental and non-capitalised equipment) where centrally charged.

Sub-head 3b (General educational expenditure)

All institutions should complete sub-head 3b.

29. This Sub-head should include expenditure incurred on:

a. Examinations (including external examiners, printing etc.)

b. Fellowships, scholarships, bursaries and prizes

c. Fee remission

d. Provisions for bad debts in respect of unpaid fees (if, however, the teaching service has not been provided, then the fees written off should instead be shown as a reduction in income against the appropriate Head in Table 6a.)

e. Educational publications

f. Public lectures, concerts and exhibitions

g. Subscriptions and contributions to learned societies and similar bodies

h. Contributions to representative bodies and agencies

i. Works of art

j. Contributions to the institution's press

k. Research projects not returned under other Heads

l. Explorations and expeditions

m. Institution representation at conferences, seminars, etc.

n. Administration of non-departmental Arts Centres, Theatres, etc., excluding expenditure appropriate to Head 5

o. Widening participation activity, including schools liaison, Outreach programmes, Summer schools etc.

p. Student recruitment costs (home and overseas).

Sub-heads 3b i-iii (Institutions in Wales only)

30. Institutions in Wales are required to separate out national and institutional specific bursaries and scholarships from 4b (General education expenditure) into sub-heads 3b i-iii, and enter the total into 3b. Institutions in England, Northern Ireland and Scotland are not required to complete these sub-heads.

i. National Bursaries

ii. Institutional specific bursaries and scholarships

iii. Other general expenditure. This sub-head should include expenditure incurred on:

a. Examinations (including external examiners, printing etc.)

b. Fee remission

c. Provisions for bad debts in respect of unpaid fees (if, however, the teaching service has not been provided, then the fees written off should instead be shown as a reduction in income against the appropriate Head in Table 6a.)

d. Educational publications

e. Public lectures, concerts and exhibitions

f. Subscriptions and contributions to learned societies and similar bodies

g. Contributions to representative bodies and agencies

h. Works of art

i. Contributions to the institution's press

j. Research projects not returned under other Heads

k. Explorations and expeditions

l. Institution representation at conferences, seminars, etc.

m. Administration of non-departmental Arts Centres, Theatres, etc. excluding expenditure appropriate to Head 5

n. Widening participation activity, including schools liaison, Outreach programmes, Summer schools etc.

o. Student recruitment costs (home and overseas).

Sub-head 3c (Staff and student facilities)

All institutions should complete sub-head 3c.

31. This Sub-head should cover expenditure incurred on the provision of facilities and amenities for the use of students and/or staff, including:

a. Careers Advisory Services (where staff involved have more than one function, an appropriate apportionment of pay should be made)

b. Grants made to student societies, including additional subventions to student unions for specific purposes

c. That proportion of the emoluments of wardens of halls of residence in respect of all duties performed in that role

d. Accommodation Services (where staff involved have more than one function, an appropriate apportionment of pay should be made)

e. Health Services

f. Athletic and sporting facilities except maintenance

g. Transport of staff and students between colleges sites, etc.

h. The Officer Training Corps (OTC) and the Air and Naval Squadrons

i. Chaplaincy Centres

j. Student counselling

k. Crèches

l. Expenditure on staff and student amenities and facilities not covered above.

32. This Sub-head should not cover any expenditure on physical education as an academic subject which should be shown under Head 1. Income received for the use of athletic facilities should be shown under Sub-head 4g of Table 6b. Maintenance of sports premises should not be included under this Sub-head, but should be included under Head 4.

Head 4: Premises

33. This Head should show all expenditure incurred (whether centrally or departmentally) on the management of premises (including academic buildings, central academic services, art centres, institution's health service premises, pavilions, sports buildings, etc) and on roads and grounds except residences and catering (which should be covered by Head 5).

Sub-head 4a (Repairs and maintenance)

34. This Sub-head should record the expenditure incurred on the maintenance of premises, including the pay of staff involved (including estates administration staff). It covers expenditure to keep premises in good repair, and to replace and or maintain existing systems.

35. Maintenance provision charges are included under this Sub-head. Any charge to (or release from) a maintenance provision should comply with FRS 12. Provisions are still permissible where there is a legal or constructive and quantifiable liability.

Sub-head 4b (Other expenditure)

36. Should cover expenditure on premises not covered by Sub-head 4a. This should include:

a. Rates (the uniform business rate charged by local authorities)

b. Payments made for the rental of premises

c. Recurrent costs of energy (fuel, gas and electricity), water and sewerage

d. Depreciation of all buildings except residential, catering and conference buildings

e. Cost of insuring all premises and their contents

f. Cost of cleaning (i.e. salaries, wages and materials, and payments in respect of contract cleaning)

g. Cost of portering and security services.

Head 5: Total residences and catering operations (including conferences)

37. This Head should show the gross expenditure incurred in providing the residence, catering and any conference operations, including the cost of maintenance of residential and catering premises, salaries and any other identifiable costs relating to these operations. The depreciation costs and financing costs of these operations should be included under Column 5 (Depreciation of tangible fixed assets) and Column 6 (Interest and other finance costs) within this Head. The long-term maintenance provision charge for residences and catering operations should be returned under Column 4 (Other operating expenses).

Head 6: Research grants and contracts

38. This Head should provide a total of the direct costs attributed to research grants and contracts with appropriate analysis between the sources of income, as defined in the column definitions in Table 5a and Table 5b. The total expenditure should be the same as that recorded in the financial statements.

39. BIS Research Councils, The Royal Society, British Academy and The Royal Society of Edinburgh are shown individually, and the data under sub-heads 6ai - 6aviii require direct input for Columns 1, 2, 4 and 5.

Head 7: Other expenditure

Sub-head 7a (Pension cost adjustment)

40. In accordance with FRS 17 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 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 against this Head, rather than against departments - pro-rata between academic and other staff costs. Costs such as maternity pay and sick pay should be treated as normal staff costs, and allocated under the appropriate cost centre.

Sub-head 7b (Other)

41. This should include direct costs attributed to other services rendered and any expenditure not covered by the other expenditure Heads in this table.

Head 8: Total expenditure

42. This Head is automatically calculated and the figures link directly into Table 1.