Financial Management Strategy

Overview

1. The over-riding objective of the Financial Management Strategy is to provide the Northeastern London Board with a framework through which Northeastern University London’s (the University) financial sustainability can be secured and through which the Risk Management Strategy can be implemented in the financial affairs of the University. It is also how the Northeastern London Board can satisfy itself as to the probity with which external funds are managed.
2. The Financial Management Strategy, which supports the University’s overall Strategic Plan and is allied to the Risk Management Strategy, is underpinned by four key principles which are:
   1. Integration with other relevant policies and strategies.
   2. Relevant to resource managers and/or budget holders throughout the University.
   3. Long term focus while allowing flexibility.
   4. Robust framework for decision making.
3. The requirement to deliver sustainability is supported by the following principle objectives:
   1. Establish and maintain effective and commercially focused financial stewardship arrangements and embed throughout the University.
   2. Ensure appropriate levels of capital for day to day operations and finance for investment in accordance with the University’s wider strategic plan.
   3. As far as practicable the University’s financial management will be transparent and open as possible to the relevant parties. 

Scope and Principles of the Strategy

4. The University has been entrusted with public and private funds to fulfil its mission of learning and teaching, research and community engagement. In carrying out activities to support its mission, the University complies with specific financial administration, accounting, control, management, audit and reporting requirements, as specified in the relevant legislation.  
5. To assist the University to meet these requirements, this strategy, its purpose is to ensure that University funds and resources are used only for University purposes, and that appropriate financial controls are developed, documented and applied to prevent the abuse or misuse of funds and other resources and to manage risks to the University’s sustainability.
6. This strategy sets out the principles of financial management which underpin all financial activities undertaken by, and within, the University. 

Scope

7. This strategy applies to all of the University community.

Strategy Principles

8. Risk management – The University applies this strategy taking into account its Risk Management Strategy, in particular concerning risks to the financial sustainability of the University.
9. Authorisations – No University funds may be committed or expended except by approval of a University staff member with the authority to approve. 
10. Use of University funds – University funds must only be expended on goods and services for University purposes. Any funds from external sources tied to particular purposes, such as grant funds, must be used only for the specified purposes.
11. Financial records – All financial transactions must be properly documented and accurately recorded in a timely manner and in accordance with University’s policies, procedures and business processes. It is an offence under anti bribery legislation to falsify accounting documents (including altering, concealing or destroying financial records or failure to make or amend an accounting document) either intentionally or unintentionally, to facilitate or disguise illegitimate financial transactions.
12. Integrity – All members of the University community are to act in an ethical and honest manner in all aspects of procurement and financial expenditure involving University funds.
13. Care and use of University property – All users of University property must:
    1. Treat University property with care and consideration, in accordance with accepted community standards.
    2. Use University property for University purposes only, and in accordance with manufacturers’ instructions, safe work practices and any relevant University procedures.
    3. Ensure University property is appropriately secure from damage, theft or misappropriation.
14. Compliance – All members of the University community are required to comply with this policy and related University procedures and business processes. Failure to do so may result in disciplinary action and/or the withdrawal of University privileges, services and facilities.

Implementations of the Strategy

15. This strategy is manifested in various practices undertaken by the University:
    1. The practical manifestation of the Financial Management Strategy occurs in a number of business process undertaken by the University:
       1. Approval of an annual budget and a three-year plan by Northeastern London Board this is following a proposal by the Executive Committee which is informed by inputs from the Senior Management, in itself informed by the Remuneration Committee for Staff and the Resource Allocation Group, and the Remuneration Committee. 
       2. Northeastern London Board then has a set of monthly Management Accounts that are prepared by the University’s finance function.
       3. A full external audit is carried out independent auditors following the end of the accounting period. 
       4. Individual budget holders are responsible, on receipt of information from the University’s finance function, for managing their budgets as agreed in Northeastern London Board approved yearly budget.
    2. The Authority limits are set out in Schedule 1 below are required to be followed by all University members as appropriate.        
    3. In addition, there are also a number of standalone documents that form part of the overall financial management strategy:
       1. The Expenses Policy included in the Staff Handbook sets out the limits and procedures for members of University.
       2. The Student Ambassadors Handbook sets out how they get remunerated and how they claim expenses when they perform that role for the University.

Schedule 1 

Authority Limits

Principles

The purpose of authority limits is to control spending within budgeted levels and to ensure financial accountability, without paralysing the business.  Therefore:

• Authority must be obtained before any cost is incurred, except for routine utilities.
• Authority cannot be delegated. If an individual is unavailable, use the next level up.
• Budgeted and unbudgeted expenditure have different limits.
• All related expenditure must be grouped to determine the authority level (so four computers at £1,000 each require one authorisation at £4,000, not four at £1,000).
• For leased and hired items and for temporary staff costs, the total cost for the entire contract or notice period determines the authority level. If the contract is open- ended, with less than 12 months’ notice, the cost for 12 months determines the level.
• If the need is urgent, do not allow the process to cause delay: use email.

Consent matters*

* This is only a summary of the financial consent matters, requiring Northeastern London Board approval.

General Limits

All the authorities delegated below are subject to the following overriding limits:

The COO can confirm whether a particular item is budgeted.

Capital expenditure (generally to purchase identifiable assets at over £1,000 each)

Employment

Expenses

Budgeted Exhibition and Marketing Costs

External Services and Site Maintenance

Other Items

Unbudgeted items over £25,000 and budgeted items over £100,000 require Board approval.

Consumables, Equipment and Office Supplies

Approval Process

Approval can be obtained by email and ratified in writing at the next opportunity, such as the next Northeastern London Board meeting.