Financial Regulations

SMG is responsible for the custody and security of the University’s assets, both tangible (eg. land, buildings, equipment, stock, fine art) and financial (eg. investments, cash).  In instances where security is thought to be in doubt or there is believed to be a requirement for special security arrangements SMG members have an obligation to consult with the University’s Security Team.

The University’s accounting policies with regard to assets are set out in the Statement of Principal Accounting Policies which is contained within the annual financial statements.

The Finance Committee is responsible for approving a Treasury Management Policy for cash management, long term investments and borrowings. This will require compliance with any relevant covenants contained within the Financial Memorandum as agreed with the SFC. The day to day operations in relation to treasury management are delegated to the Tax, Treasury and Reporting Manager and the Treasury Manager within the Finance Office. The Executive Director of Finance will report to the Finance Committee on the activities of the treasury management operation and on the exercise of the powers delegated to the Finance Office.

Investment Advisory Committee

The Finance Committee has established an investment sub-committee, the Investment Advisory Committee, with the following remit:

1. To advise the Finance Committee, and through it, Court on investment policy.
2. To advise Finance Committee and through it, Court on the impact on current or proposed investments of restrictions and advise alternatives.
3. To appoint and replace Investment Managers to act on the University's behalf to deliver return and growth objectives set by Finance Committee.
4. To monitor the activities and performance of the Investment Managers.
5. To ensure that the Committee's membership includes the skills and experience necessary to address its remit effectively. To this end, the Committee may request the Finance Committee to appoint additional members as required. The Chair of the Committee and Executive Director of Finance will participate in the selection process for a new member.
6. The Committee will from time to time undertake a review of its own performance and effectiveness as part of the overall review of Finance Committee.

It meets twice per year or more frequently, on the request of the Finance Committee.

Approval of banks, investment managers and custodians

University Court has delegated responsibility to the Finance Committee for the appointment of the University’s bankers and other professional financial advisors (such as investment managers and brokers). In appointing bankers or other professional advisors, the University tendering processes must be followed – see 6.01 Procurement and Tendering.

Non-endowment cash balances of the University are invested in accordance with the University’s Treasury Management Policy, which is approved by the Finance Committee.

Opening and closing of bank accounts

Once the University has approved appointment of a bank, Finance Committee authorisation is required for the opening or closing of a University bank account.  Dual signatories are required to open and/or close a bank account.

Bank mandates

All automated transfers on behalf of the University, such as BACS or CHAPS, and cheques drawn, must be authorised in accordance with the prevailing bank mandate approved by Finance Committee.

Standing orders and direct debits may be approved by the Executive Director of Finance on an exception basis.

Bank reconciliations

The Executive Director of Finance is responsible for ensuring that all bank accounts are subject to regular reconciliation and that large or unusual items are investigated as appropriate.

The use of physical cash is only permitted in accordance with the University’s Cash Handling Policy and for the specific purposes outlined therein. 

Applications to hold a Petty Cash account or to have it increased should be made to the Tax, Treasury and Reporting Team within the Finance Office who may authorise a School or Administrative Service to hold a Petty Cash float, normally not exceeding £100. The cash should be held in a safe, lock-fast place, and, if possible, be in the custody of one person. If control has to be rotated, at lunch times or holiday times etc, the cash should be checked at each hand-over for the protection of everyone concerned.   The custodian should ensure that all receipts are signed by the payee and it is recommended that each receipt be endorsed as 'paid'.

Once the initial petty cash as issued has been almost fully used, a duly authorised application, with receipts and bearing an original signature should be submitted to the Finance Office to have the float reimbursed.

Endowment assets are invested via investment managers who are appointed in accordance with 7.02 Treasury Management.  The Executive Director of Finance has the responsibility for determining the appropriate rate of return on the University’s endowment assets to meet the stated objectives of the endowment funds.  Subject to the wishes of the donors, the Executive Director of Finance will also be permitted to reorganise the various endowment funds received, where appropriate, to meet charitable objectives.

It is the responsibility of the Investment Advisory Committee to advise the Executive Director of Finance on the investment policy of the funds after approval by the University Court. Within the framework of the approved investment strategy, operational investment decisions are made by third party investment managers appointed by University Court.

The Investment Advisory Committee sets a Socially Responsible Investment Policy and will monitor the external investment managers’ compliance with the policy. 

The Tax, Treasury and Reporting Team is responsible for preparing a Fixed Asset Policy for approval by the Finance Committee.  The University’s Fixed Asset Policy must include the University’s policy on the following:

• Definition of fixed assets
• Acquisition and capitalisation policy
• Depreciation thresholds
• Repairs and maintenance policy
• Requirements to conduct regular asset register checks
• Disposals of fixed assets

Assets owned or leased by the University shall not be used for personal purposes without prior authorisation from the relevant Head of School or Department.

The Estates Committee has responsibility for the governance and strategy of the University's estate, with day to day implementation being the responsibility of the Estates Directorate.  All repairs and renewals of University property should be carried out by, or under the supervision of Estates. All building contracts are therefore the responsibility of Estates.

Maintenance and capital expenditure

Estates manage the estate refurbishment and development expenditure as a series of projects and it is the total value of each project which will determine the approval process that is followed to approve expenditure.  Approval must be sought In accordance with the University’s Scheme of Delegation for the relevant value of the project or contract.  The approval required depends on whether the project is capital or revenue expenditure

Each project may contain expenditure that is capitalised and / or expenditure which will be expensed in the year incurred. Each project must be capitalised, expensed or a combination of both, in accordance with the Fixed Asset Policy.

 Acquisition of land and buildings

The Financial Memorandum between the SFC and the University requires the University to develop and maintain an Estate Strategy encompassing the acquisition of land and buildings. University Court is also required to keep its holding of Exchequer-funded land and buildings under review with the objective of rationalising and disposing of those holdings which, in the light of its Estate Strategy, the University considers to be no longer needed.

The University Court is the only body within the University with the power to purchase property, enter into a property lease or sell University property.  The University Court has delegated authority to approve purchases, sales and leases in accordance with the Scheme of Delegation.  Approval must therefore be sought from the Executive Director of Finance, Executive Director of Estates, Estates Committee, Investment Committee, Finance Committee or University Court depending on the value of the sale, purchase, or lease.

The details of any purchase, subject to the parameters set by SMG, Finance Committee and/or University Court, will be negotiated by the Estates Directorate with appropriate legal advice being sought.  The Estates Directorate is responsible for keeping the Finance Office informed of progress and for obtaining timely input from the tax team on tax planning matters relating to the acquisition and any other requirements included in the Fixed Asset Policy.  The acquisition must be recognised on the University’s general ledger and fixed asset register in line with the Fixed Asset Policy.

Leases

The Estates Directorate is responsible for negotiating any new leases for buildings, must do so only in line with the Estates Strategy and must seek appropriate approval in line with the Scheme of Delegation.  Signed copies of all leases must be deposited with the University’s external legal providers to be retained for safe keeping, with a pdf version retained by the Estates and Buildings Office.    

The final arrangements will be reported to University Court for ratification; formal documentation must be signed by the Secretary of Court and a member of University Court and must be sealed.

Leases must be accounted for in the University’s general ledger in accordance with the Fixed Asset Policy.

Disposal of land and buildings

All disposals of land or buildings must be authorised by the University Court or delegate, in line with the Scheme of Delegation and in accordance with the Estates Strategy.  All proposals for disposal must include the information outlined in the Fixed Asset Policy.  Negotiations can only be conducted by the Estates Directorate with assistance from the Court and Finance Offices, to ensure the disposal is made on the best possible terms for the University.

The Tax, Treasury and Reporting Team within the Finance Office must be informed prior to approval of any sale to review:

• If the sale must be notified to the University’s banks under banking covenants
• The tax implications of the sale and any VAT options
• The correct accounting for the disposal, in line with the Fixed Asset Policy.

Formal documentation relating to the disposal of property must be signed by the Secretary of Court and a member of University Court.  Documentation must be retained by the Estates and Buildings Office.

SMG members are responsible for establishing adequate arrangements for the custody and control of other plant and equipment within their areas of responsibility, including annual asset register checks.  Requirements for maintenance, monitoring and depreciation are outlined in the Fixed Asset Policy.

Plant and equipment must be purchased in accordance with:

• The requirements outlined in 01 Procurement and Tendering
• The approval process for the type of purchase, as outlined in the Scheme of Delegation. This differs depending on the type of purchase:
• Information Services
• College specific capital investments
• Professional services capital investments
• The purchasing authorities included in the Scheme of Delegation and which are reflected in the University’s finance system

Plant and equipment must be capitalised in accordance with the Fixed Asset Policy.

Disposals of plant and equipment must only be made in accordance with the Fixed Asset Policy and must be reflected in the University’s finance system and Fixed Asset Register in line with the Fixed Asset Policy.

SMG members are responsible for establishing adequate arrangements for the custody and control of stocks and stores within their areas of responsibility, including ensuring that regular inspections and stock takes are carried out.

Stocks and stores of a hazardous nature must be subject to appropriate security checks and methods of storage must have been approved by the Safety and Environmental Protection Services (SEPS) Office.

The prior approval of the Executive Director of Finance must be obtained as to the appropriateness of the proposed accounting system / process before stock holding commences.

Staff responsible for stock locations must ensure that:

• Stock records are properly maintained at all times;
• Stock is ordered in accordance with the University’s procurement policy and with due consideration to obtaining best value;
• Procedures are in place to account for all stock movements, both in and out of store;
• All transfers out for sale are made on an arms-length basis (normally deemed to be market value);
• Stock is adequately protected against loss, misuse or obsolescence;
• The accuracy of stock records is to be regularly reviewed and validated and obsolete items identified;
• Obsolete stock must not be retained on an open-ended basis, but be disposed of in accordance with the principle of best value;
• Stock held in store is to be valued on the basis of the lower of cost or net realisable value.

Certain activities undertaken within the University including may give rise to ideas, designs and inventions, which may be patentable. These are collectively known as intellectual property.

Through its position as employer, University Court is usually the legal owner of intellectual property developed by its members of staff if created in the course of their employment.  Any proposal involving the commercial exploitation of intellectual property requires the approval of University Court. University Court has delegated this authority to the Secretary of Court, who is advised on such matters by Research and Innovation Services.
 
In determining the potential for commercially exploiting intellectual property and the means by which this may be achieved, Research and Innovation Services will have regard to:

• The extent to which the intellectual property may be legally protected, i.e. by patent, copyright, trade mark, design right or registered design.;
• The size of the potential market for such intellectual property, and the potential commercial return from exploitation;
• The ability of the University, and of the members of staff concerned, to support further technical development of the intellectual property;
• The existence or prospect of commercial support for development and exploitation.

The detailed policy is included in the Policy for Intellectual Property and Rewarding Participation in Commercialisation.

The Executive Director of Finance is responsible for the University’s debt management and credit arrangements.  In addition to the requirements in 4.07 Sales Invoices, he/she will ensure that there are policies and procedures in place to collect receivables owed to the University, including but not limited to:

• Regular sales ledger reconciliations
• Monies received posted to the correct debtors account on a timely basis
• Swift and effective action is taken in collecting overdue debts
• Outstanding debts are monitored and pursued, and reports are prepared for management.

To ensure Accounts Receivable are accurately valued, debt is reviewed in accordance with the University’s bad debt provision process and any which is deemed irrecoverable, is accounted for as such.