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Finance Forum

Finance Forum . September 2012. Agenda. University Financial Forecasts (CP) Changes in the Finance Office (MR) Finance Training (GH) Pensions Developments (GH) Systems Developments (MR). Scope of Financial Forecasts. 5 year forecasts Forecast for last year 2011/12

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Finance Forum

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  1. Finance Forum September 2012

  2. Agenda • University Financial Forecasts (CP) • Changes in the Finance Office (MR) • Finance Training (GH) • Pensions Developments (GH) • Systems Developments (MR)

  3. Scope of Financial Forecasts • 5 year forecasts • Forecast for last year 2011/12 • Budget for this year 2012/13 • Plan for 2013/14, 2014/15, 2015/16 • Include college plans • Submitted to HEFCE

  4. What is a Financial strategy? • Have enough money to meet our strategic objectives • Bring in enough income to • Pay for stuff we need to operate • Pay for stuff we need to grow

  5. Financial strategy • Generate sustainable and sufficient surplus to support research and teaching mission – move over planning period from 2% to 5% • Incorporate high priority developments • Have in place appropriate and prudent loan portfolio • Maintain prudent cash flow - measure moved from low point of one month payroll cost to two month minimum

  6. Operating surplus trend

  7. Projections of income

  8. Expenditure assumptions • New investments in posts, ITS (to support IT Strategy), PGR Scholarships, Careers Service and Library • Contingencies around student recruitment, future HEFCE cuts, pressure on research contribution and general fund • Cost control through post freeze and through VERVES / possible redundancies

  9. Capital investments £10 million • £35 million • £17 million £13 million

  10. Capital investments • Continued investment in the estate: - • 4 big schemes • Research Centres (£5m) • Indicative schemes for MSB and Attenborough • Funded by surplus and £45m of new borrowing

  11. Risks and opportunities • Key risks • Further HEFCE cuts • Home / EU recruitment • Overseas recruitment • Other income • Cost control not achieved • Interest rates • Competitive position • Opportunities • AAB  ABB • Overseas recruitment • Fundraising • REF 2014

  12. Summary • We continue to have a strong position • Challenges ahead in respect of income growth and cost control • We are continuing to invest • Good opportunities in the medium term

  13. Any questions

  14. Changes in the Finance Office

  15. Finance Office Plan 2012-2015

  16. The Division • Finance Office • Enterprise and Business Development Office • Sports and Recreation (except for Estates items)

  17. The Senior Management Team Also within ITS

  18. Finance Office Plan 2012-2015

  19. Controls

  20. Controls • A robust control environment • Appropriate to size and nature of UoL • Focus on high level controls • Constructive (and challenging) relationship with auditors • Thorough compliance • Accurate, first time • Review, and planned well in advance of deadline

  21. Customers • Efficient and customer focussed processes / systems • Avoid waste • Minimise hand-offs • Think from perspective of the customer • Professional guidance and advice • A professional, up-to-date team • Best practice within the sector

  22. Our people • We seek to: - • Work as one team • Provide a supportive working environment • Encourage staff development • Demonstrate professional and ethical approach • Celebrate achievement

  23. Changes to structure • Financial Services become Financial Operations • Accounting Services become Financial Reporting • Treasury moves into Financial Reporting • Tax moves into Financial Operations

  24. Finance Training • Introduction to Finance. Next course in November. Run through staff development in usual way (x2 per year) • Staff Induction Programme. Finance Roadshow for new starters (x3 per year) • Finance within Blackboard. Developing short guides within the courses area • Complete and loaded Guide to completing expense claim forms VAT Introduction to Finance • In development Introduction to Procurement Introduction to SAP (development of info on ITS site) Budgetary management Financial Regulations • Specific Issues. Bribery Act. Mike Newton and Internal Auditors. Open session. Now doing specifics – Residences and Catering, Estates and Colleges • SAP Purchase Orders (x3 per year) 14th September. Invoice verification etc. Linda Stirk and Michelle Pond in Staff Development

  25. Pensions Developments

  26. Auto-Enrolment • Government committed to ensuring pensions available to workers • Employers required to auto-enrol into an eligible pension scheme • Both USS and FriendsLife are eligible schemes • Requires existing workers not in eligible schemes to be assessed:- • Eligible jobholders (key group) • Non-eligible jobholders (also important) • Entitled (also important) • Defined by age and qualifying earnings. Different treatment for each group • Starting date for University – 1st April 2013 • Also have to assess and auto-enrol new starters from 1st April 2013

  27. Eligible jobholders • Qualifying earnings £8,105 and £42,475 • Aged between 22 and SPA • Have to be automatically enrolled Non-eligible jobholders • Qualifying earnings £5564 and £8,105 • Age between 16 and 74 • Have the right to opt in and employees are required to make contributions Entitled workers • Qualifying earnings up to £5564 • Aged between 16 and 74 • Have the right to join, but employer does not have to contribute

  28. Present arrangements • USS is in effect an auto-enrolment Scheme as it is, but must adopt the requirement routines • FriendsLife. Open to all staff in grades 1 to 5. Self-initiated membership. Must operate the auto-enrolment process for eligible jobholders

  29. No barriers to be placed in the way • Those auto-enrolled have a month to opt out (thereafter membership not compulsory) • Then re-enrolled 3 years later (and thereafter), but can then opt out • Complex process and number of decisions to be made • Large numbers. Staff holding contracts of employment through HR and not in a pension scheme • USS (Grade 6 and above) 148 – of which 116 are eligible for auto-enrolment • FriendsLife (Grades 1-5) 1533 – of which 403 are eligible for auto-enrolment

  30. Further complexities around fees payroll. Part of HR Systems Thinking Initiative • Discussions on-going with FriendsLife about terms and IT process • Communication process – late 2012 • Assessments – starting January 2013 • Impact on costs. Provision made in 2012 Financial Forecasts

  31. Systems Developments • SAP Authorisations – now complete • HR / Finance Systems Thinking – make me a member of staff • Currently focussed on the recruitment process • Flow of starters through the process • Future projects • Purchase to payment cycle • Legislative changes (Auto-Enrol and RTI) • More work on Salary Sacrifice (inc for sport)

  32. Any questions

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