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Finance record 2015/16 - Table 8: Expenditure by activity and HESA Cost Centre

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Finance record 2015/16 - Table 8: Expenditure by activity and HESA Cost Centre

Version 1.1 Produced 2016-11-17

Contents:

    Table 8 provides a further analysis of the five 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.

    Under the implementation of fEC the costs of Higher education providers (HEP) activities remain as they would otherwise have been. On the face of the consolidated statement of comprehensive income and expenditure the categories of staff costs, fundamental restructuring 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. HEPs should therefore note that there is no change to the guidance for reporting of research expenditure.

    Columns

    Column 1 (Academic staff costs)

  1. Staff costs should cover all staff for whom the HEP is liable to pay Class 1 National Insurance contributions and/or who have a contract of employment with the HEP. This should include any redundancy or restructuring payments (where they have not been treated as fundamental restructuring costs), 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 5).
  2. LGPS and similar schemes

  3. In accordance with FRS 102 current and past service costs should be returned under staff costs in the HEP's consolidated statement of comprehensive income and expenditure. However, for the purposes of the Finance record, the pension contributions payable for any scheme treated as a defined benefit scheme under FRS 102 should be analysed out by department but any FRS 102 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 HESA cost centre.
  4. Multi-employer pension scheme deficit recovery plan (e.g. USS, SAUL)

  5. This staff cost element should be returned under Head 7.
  6. Column 2 (Other staff costs)

  7. This Head should contain any costs associated with non-academic staff, not attributable under Head 1.
  8. Column 3 (Total staff costs) - Automatically calculated.

    Column 4 (Fundamental restructuring costs)

  9. Fundamental restructuring costs should be returned in this Column under Head 7b (Other expenditure).
  10. Column 5 (Other operating expenses)

  11. Other operating expenses should be allocated to academic department cost centres under Column 5 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).
  12. Amortisation should be recorded under this Column against the appropriate HESA Cost Centre.
  13. Equipment that has not been capitalised should be recorded under this Column against the appropriate HESA Cost Centre.
  14. 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.
  15. If not split by HESA cost centre, the total should be included under Column 5 Head 3a (Central administration & services). Other operating expenses on residential, catering and conference operations should be shown against Column 5 Head 5.
  16. Column 6 (Depreciation)

  17. Depreciation on capitalised equipment should be recorded according to where the assets being depreciated are located. It is not necessary to apportion the depreciation for 'central' equipment over the cost centres.
  18. 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.
  19. Depreciation on all assets employed on residential, catering and conference operations should be shown against Head 5 (Residences and catering operations (including conferences)).
  20. Depreciation which cannot be allocated to Heads 1 to 6 should be recorded under Head 7 (Other expenditure).
  21. Column 7 (Interest and other finance costs)

  22. This Column is only applicable to Head 4 (Premises), Head 5 (Residences and catering operations (including conferences)) and Head 7 (Other expenditure).
  23. Column 8 (Total expenditure) - Automatically calculated.

    Head 1 (Academic departments)

  24. 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.
  25. Sub-heads 1a - 1as (HESA Cost Centres 101 to 145) refer to departmental cost centres providing postgraduate, undergraduate and any further education award or credit bearing courses.
  26. Where these departments also run Continuing Education courses, expenditure on these courses should be attributed to the parent departmental cost centre rather than Sub-head 1aj Continuing Education (cost centre 136). Sub-head 1aj (136 - Continuing Education) should cover expenditure on Continuing Education courses, which are run by separate Departments of Continuing Education or Extra-Mural Studies.
  27. Head 2 (Total academic services)

  28. 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.
  29. 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 HEP 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.
  30. Recurrent expenditure on departmental computers or by departments on computers in other HEPs 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.
  31. 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.
  32. Head 3 (Administration & central services)

  33. 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.
  34. Sub-head 3a (Central administration & services)

  35. This head should include the costs of central administrative staff, and such payments to heads of HEPs, Professors, Deans, Tutors, Faculty Officers and the like, as are made in respect of central (as distinct from departmental) administrative work.
  36. 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.
  37. This Sub-head should include costs associated with the following, unless charged to the relevant cost centre:
    • Public relations
    • Advertising of and recruitment to all vacancies
    • Removal expenses of all staff
    • Publications, excluding educational publications
    • Rating or council tax advisers
    • Security of wages
    • Bank charges, excluding interest (which should be shown under head 7)
    • Calendar, prospectuses, regulations etc.
    • General advertising
    • Other costs of faculty offices in respect of central administrative work
    • Legal and audit fees
    • Internal audit
    • Superannuation management (including where outsourced)
    • Postage where centrally charged
    • Expenses of Head of HEP
    • General insurance costs not included elsewhere
    • Telephone costs (calls, rental and non-capitalised equipment) where centrally charged.
  38. Sub-head 3b (General educational expenditure)

  39. All HEPs are required to separate out national and provider specific bursaries and scholarships from 3b (General education expenditure) into Sub-heads 3b i and ii. HEPs in England, Northern Ireland and Scotland are required to complete these Sub-heads.
  40. Sub-head 3bi (National Bursaries (including from the Postgraduate Support Scheme))

  41. This Sub-head should not include fee waivers, which should be netted off against tuition fee income. Similarly, the provision of free or discounted services such as student accommodation should be netted off against the income stream to which they relate and therefore should not appear in expenditure.
  42. HEPs in England - Note that the government element of the Postgraduate Support Scheme (PSS) will be accounted for on a principal basis by HEPs, and therefore will be included in the income and expenditure account, in both the published accounts and in the Finance record.
  43. Sub-head 3bii (HEP specific (including departmental) bursaries and scholarships)

  44. This Sub-head should include the cost of any cash payment made to a student for a bursary (excluding PSS bursaries), prize, scholarship, or other similar award paid from a HEP's own funds. This should include bursary payments made available by Research Councils and charities under Doctoral Training Centre type arrangements, where the HEP acts as principal.
  45. Bursaries paid from the funds of third parties, where the HEP is acting in an agency capacity, will not be included in this heading, or within the HESA Finance record, as they will have been accounted for as an 'Agency Arrangement'.
  46. This Sub-head should not include fee waivers, which should be netted off against tuition fee income. Similarly, the provision of free or discounted services such as student accommodation should be netted off against the income stream to which they relate and therefore should not appear in expenditure.
  47. Sub-head 3biii (Other general expenditure)

  48. This Sub-head should not have any bursary spend. This should include expenditure incurred on:
    • Examinations (including external examiners, printing etc.)
    • Fellowships
    • 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 6.)
    • Educational publications
    • Public lectures, concerts and exhibitions
    • Subscriptions and contributions to learned societies and similar bodies
    • Contributions to representative bodies and agencies
    • Works of art
    • Contributions to the HEP's press
    • Research projects not returned under other Heads
    • Explorations and expeditions
    • HEP representation at conferences, seminars, etc.
    • Administration of non-departmental Arts Centres, Theatres, etc. excluding expenditure appropriate to Head 5
    • Widening participation activity, including schools liaison, outreach programmes, summer schools etc.
    • Student recruitment costs (home and overseas).
  49. Sub-head 3c (Staff and student facilities)

  50. This Sub-head should cover expenditure incurred on the provision of facilities and amenities for the use of students and/or staff, including:
    • Careers Advisory Services (where staff involved have more than one function, an appropriate apportionment of pay should be made)
    • Grants made to student societies, including additional subventions to student unions for specific purposes
    • That proportion of the emoluments of wardens of halls of residence in respect of all duties performed in that role
    • Accommodation Services (where staff involved have more than one function, an appropriate apportionment of pay should be made)
    • Health Services
    • Athletic and sporting facilities except maintenance
    • Transport of staff and students between colleges sites, etc.
    • The Officer Training Corps (OTC) and the Air and Naval Squadrons
    • Chaplaincy Centres
    • Student counselling
    • Créches
    • Expenditure on staff and student amenities and facilities not covered above.
  51. 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 4h of Table 7. Maintenance of sports premises should not be included under this Sub-head, but should be included under Head 4.
  52. Head 4 (Premises)

  53. This Head should show all expenditure incurred (whether centrally or departmentally) on the management of premises (including academic buildings, central academic services, art centres, HEP's health service premises, pavilions, sports buildings etc.) and on roads and grounds except residences and catering (which should be covered by Head 5).
  54. Sub-head 4a (Repairs and maintenance)

  55. 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.
  56. Maintenance provision charges are included under this Sub-head. Any charge to (or release from) a maintenance provision should comply with FRS 102. Provisions are still permissible where there is a legal or constructive and quantifiable liability.
  57. Sub-head 4b (Other expenditure)
    • Should cover expenditure on premises not covered by Sub-head 4a (Repairs and maintenance). This should include:
      • Rates (the uniform business rate charged by local authorities)
      • Payments made for the rental of premises
      • Recurrent costs of energy (fuel, gas and electricity), water and sewerage
      • Depreciation of all buildings except residential, catering and conference buildings
      • Cost of insuring all premises and their contents
      • Cost of cleaning (i.e. salaries, wages and materials, and payments in respect of contract cleaning)
      • Cost of portering and security services.
  58. Head 5 (Residences and catering operations (including conferences))

    Head 5a (Residences operations (including conferences))

  59. This Head should show the gross expenditure incurred in providing the residence and any conference operations, including the cost of maintenance of residential 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 6 (Depreciation) and Column 7 (Interest and other finance costs) within this Head. The long-term maintenance provision charge for residences and catering operations should be returned under Column 5 (Other operating expenses).
  60. Head 5b (Catering operations (including conferences))

  61. This Head should show the gross expenditure incurred in providing the catering and any conference operations, including the cost of maintenance of 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 6 (Depreciation) and Column 7 (Interest and other finance costs) within this Head. The long-term maintenance provision charge for residences and catering operations should be returned under Column 5 (Other operating expenses).
  62. Head 6 (Research grants and contracts)

  63. 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 5. BEIS 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.
  64. Head 7 (Other expenditure)

    Sub-head 7a (Pension cost adjustment)

  65. In accordance with FRS 102 current and past service costs should be returned under staff costs in the HEP's income and expenditure account. However, for the purposes of the Finance record the actual pension costs for any scheme treated as a defined benefit scheme under FRS 102 should be analysed out by department but any FRS 102 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.
  66. Sub-head 7b (Other)

  67. This should include direct costs attributed to other services rendered and any expenditure not covered by the other expenditure Heads in this table.
  68. Head 8 (Total expenditure) - Automatically calculated


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