Budget Management

1. Budget Management

The Principal, Bursar and Treasurer have overall responsibility for the College budget; Department Heads, as Budget Holders, have responsibility for managing and monitoring the budget within their own areas. The Bursar must satisfy himself or herself that the budgets are being monitored effectively and retains overall responsibility for all the budgets.

Budget Holders’ responsibilities:

  • the control of income and expenditure within an agreed allocation. Budget Holders must ensure that the day-to-day monitoring is undertaken effectively.
  • Budget Holders are responsible to the Bursar for the income and expenditure appropriate to their budget allocations.
  • To ensure that specific budget allocations are only used for the purpose for which they have been allocated.
  • Where variances have been identified, these must be investigated and where appropriate the necessary corrective action must be undertaken.
  • The Bursar should be notified by email  of any draw-down from the pre-agreed contingency.
  • The Bursar must be kept up-to-date on any potential over/underspends, as soon as they become apparent.  The Treasurer should also be advised if the over/underspends are material with regard to the College’s strategy and overall budget.

2. Additional Funds

When applying for additional funds (to cover budgeted activities or where developments have occurred during the year which now require additional resources), there are two possible options for obtaining additional funds:

  • from a virement – identified amounts of underspends within budgets can be used to fund additional expenditure on budgeted activities. Each budget holder is allowed to vire money between expense codes within their own cost centres. It is important that, particularly early on in the year, amounts smaller than 15% of the annual budget are not vired until it becomes completely obvious that virement is appropriate.
  • virement should normally take place within departments and not across departments.  This is allowable where it has the consent of the Bursar.
  • from the contingency fund – with the approval of the Bursar for amounts within 2% of the overall budget or less than £5000.  For amounts over that, the Finance Committee must give approval.
  • any requests for unbudgeted expenditure, again within 2% of the overall budget or less than £5000 and not coverable by the contingency, must be approved by the Principal in consultation with the Bursar and the Treasurer.
  • all amounts exceeding the above limits must be approved in advance by the Treasurer, acting for the Finance Committee.

All expenditure incurred must be authorised within limits and authorisation levels set out in the College’s Annual Budget.  Invoices and claims must be coded correctly and passed promptly to the Bursar’s Office for payment, from whom nominal coding lists are available.

3. Authorisation of Expenditure

The table below shows persons authorised to commit the College to the purchase of goods and services and to authorise the payment for such goods and services.

Expenditure Level including VAT Job Title/Function Over £100,000 Governing Body £25,000-£100,000 Finance and General Purposes Committee £5,000-£25,000 Principal Up to £5,000 Bursar Up to £1,000 in own Department Department Heads

3.1 The expenditure levels relate to an individual order/purchase or the total of a related series of orders/purchases.

3.2 Additionally the Bursar may authorise total capital expenditure up to 10% over the approved budget. The Principal may authorise up to 20% over the approved budget. Expenditure above 20% or above £25,000 over the approved budget requires the authorisation of the Treasurer, above £100,000 by the Governing Body.

3.3 Where a supplier requires the signing of a contract, it should be signed by a Department Head.  Contracts for £10,000 or greater should be signed by the Bursar or the Principal.

4. Purchasing/Tendering/Quotes

This table shows the minimum requirements for purchases made on behalf of the Agency.

Value of purchases  or related series of purchases Minimum Requirement Over £144,371 EU requirements apply Over £50,000 Full open tender £10,001 to £50,000 Selective tender £5,001 to £10,000 At least three written quotes £1,001 to £5,000 At least two written quotes Up to £1,000 Budget Holder judgement that College is receiving value for money

4.1 When ordering any goods and services, staff should always have regard for value for money.

4.2 The College’s Terms and Conditions for Purchases of Goods and Services outlines the College’s purchasing procedures.  The University’s procurement office also has valuable procedures for purchasing goods and services.

4.3 There may be circumstances where it is not considered appropriate to tender, for example, proprietary products or technical items that need to be compatible with existing systems.  In these circumstances, the decision not to tender should be fully documented and approved by the Bursar for tenders below £25,000 and by both Bursar and the Principal for tenders over £25,000. Such decisions should be reported to the College’s Audit Committee.

5. Unspent Budgets

5.1 Unspent budget allocation from one financial year are not to be carried forward to the following financial year.  The annual budget round takes into account underspends and allocates amounts for the next year’s budget knowing that an underspend may indicate work that ought to have been done or goods that ought to have been purchased are outstanding.

5.2 Where the duration of a budget spans a financial year end (for instance on a building or refurbishment project), the estimated budget requirement for each year should be calculated and accounted for in the relevant year.