Single conversation accountability process for 2008

To:

Heads of HEFCE-funded higher education institutions, Heads of universities in Northern Ireland

Dear Vice-Chancellor or Principal

Introduction

1.   This letter outlines the accountability process for 2008 between higher education institutions (HEIs) and HEFCE. No action is required in response.

2.   In May 2007 we issued the report 'Accountability for higher education institutions: New arrangements from 2008' (HEFCE 2007/11), which confirmed that the single conversation process would apply in full from 2008. This is part of our continuing commitment to reduce the burden of regulation on the higher education sector. In that publication, we invited HEIs to submit their 2007 accountability returns to us according to the new timetable. Around half the sector did so, and this 'dry run' exercise resulted in a few changes to how the process will operate for the whole sector in 2008.

Returns and submission dates

3.   The documents to be sent to us in this year's single conversation process are in Table 1.

4.   This year we will issue a combined electronic template for the annual return of financial statements and financial forecasts, along with a request for a single commentary on past performance and future prospects.

5.   We had originally indicated that the documents marked with an asterisk (*) should be sent to us 'during December' rather than on a specific date. However, most HEIs participating in the dry run last year submitted them at the same time as their financial statements. This is because audit committees and governing bodies tend to consider these documents together. It makes sense for the single conversation process to reflect this practice. We recognise that for 2008 this may present difficulties for some HEIs, so for this year only we will accept submission of them and the financial statements later in December.

Table 1 Returns and submission dates

Annual monitoring statement (AMS)*	1 December 2008
Audit Committee annual report*
Corporate planning statement (CPS)*
Designated Officer's annual accountability return*
External audit management letter*
Financial statements
Financial forecasts*
Internal audit annual report*
Higher Education Students Early Statistics (HESES) return	9 December 2008
Research Activity Survey (RAS)	11 December 2008
Transparent Approach to Costing (TRAC) return	30 January 2009

* See paragraph 5.

6.   The HESES and RAS returns will come to us at the same time as previous years. We will publish guidance notes for completing these returns later in the year.

7.   The date for sending us TRAC returns remains 30 January, as confirmed in HEFCE Circular letter 14/2008. In the future we would like to bring this forward to fall within the single conversation time frame (31 December), but we recognise that some HEIs are still working to improve their TRAC processes. Earlier returns this year would be appreciated.

8.   We expect HEIs to alert us as soon as possible if there are any material adverse changes to their performance or risks, and not wait for such developments to be reported in the single conversation returns. This is set out in paragraph 13 of the new Financial Memorandum (HEFCE 2008/19).

Capital Investment Framework: Annual monitoring

9.   We have recently written to institutions informing them whether they have met the criteria for funding under the new capital investment framework (CIF) for 2008-11. Most institutions have already done so, and the remainder are working towards full compliance.

10.   Annual monitoring of the CIF process will form part of the single conversation. For 2008 we will ask all institutions to address the following issues in their submissions to us (see Table 2).

11.   HEIs should understand that the requirements of the next evolution of the CIF are likely to require clearer reporting of environmental performance, and they should be considering how and where this can be reported in their performance and accountability returns in the future.

Table 2 Issues to address

Corporate planning statement	Please make specific reference to estates management and sustainable development.
Annual monitoring statement	Have you broadly met the targets and objectives for 2007-08, as set out in your estates strategy? If not, please give details of material issues. Have you broadly met the targets and objectives relating to your AUDESAT*, or your own effectiveness review, and its action plan? If not, please give details of material issues.

* Association of University Directors of Estates self-assessment toolkit

Nature of the dialogue between HEFCE and institutions

12.   The main purpose of the single conversation is to simplify the accountability process. For HEIs about which we have no major concerns or queries - the great majority of them - the main outcome will be a letter updating our risk assessment of the HEI, and data that benchmark its financial performance against the whole sector. In addition, we annually publish a Board paper summarising the sector's overall performance (see item 6, 'Single conversation outcomes', in the April 2008 Board papers).

13.   There are limits on the extent to which we can offer feedback to individual institutions on their processes. However, we would like to know if there are any straightforward ways in which we can improve the nature of the 'conversation' between HEFCE and the sector. Please let us have any comments on this by 30 September 2008.

Next steps

14.   As in previous years, we will issue a publication setting out the detailed reporting requirements, and we expect to do this in September. In the meantime, if you have any questions about this letter or any other aspect of this year's single conversation process, please contact your HEFCE assurance consultant, as follows:

London	Nolan Smith (n.smith@hefce.ac.uk, 0117 931 7376)
East of England, East Midlands, West Midlands	Andrew Malin (a.malin@hefce.ac.uk, 0117 931 7332)
South East, South West	Ian Parry (i.parry@hefce.ac.uk, 0117 931 7091)
North West, Yorkshire & Humberside, North East, Open University, Northern Ireland	Richard Allen (r.allen@hefce.ac.uk, 0117 931 7389)

Yours sincerely

Professor David Eastwood
Chief Executive

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