Financial memorandum
The financial memorandum has an effective date of 1 January 2006.
Preamble
1 This memorandum sets out the formal relationship between the Scottish Further & Higher Education Funding Council (‘the Council’) and ‘the institution’. The foundation of the relationship is provision of funding by the Council to the governing body of the institution, according to statute.
2 The constitutional arrangements for the relationship are laid down in the relevant statutes and instruments of governance which establish the autonomy of the institution and the powers and duties of the Council.
3 For these arrangements to be effective the Council and the institution have to work in partnership to assist the delivery of the Scottish Executive’s policies for further and higher education and to secure best value from the investment of funds derived from Scottish Ministers. The ultimate purpose of all these partnerships, policies and investments is to secure further and higher education in Scotland which meets the nation’s economic, social and cultural needs by providing excellent learning opportunities for students and outstanding research. The Council recognises that the institution may also undertake activities and have to comply with legislation and regulation which fall outside the scope of this partnership.
Purpose of the memorandum
4 Accordingly, this memorandum sets out the expectations of the institution and the requirements which are a condition of the Council’s funding. It also sets out the agreed expectations which the institution, in the spirit of constructive partnership, has a right to have of the Council.
What the institution can expect of the Council
5 The Council will conduct its affairs at all times to the highest accepted standards for public sector bodies. It will act reasonably on the basis of the fullest available evidence and objective analysis. Subject to any legal requirement to observe confidentiality, it will be open and transparent with the institutions it funds and other stakeholders, and will give or be prepared to give a public justification of all its decisions.
6 The Council will maintain a policy on openness which sets out the work of the Council, the services it aims to provide and how to complain or appeal if something goes wrong.
7 The Council will maintain regular and frequent dialogue with institutions and their representative bodies where it seems appropriate to:
(i) promote a shared understanding of the aspirations, needs and concerns of the various stakeholders;
(ii) support the beneficial impact of institutions’ collaborative activities; and
(iii) better enable it to provide the information, advice and assistance Scottish Ministers require of it.
8 The Council will not substitute its judgements for those which are properly at the discretion of institutions. In particular, the Council will seek to maximise the discretion of institutions to use grants provided by the Council.
9 In discharging its duty to monitor and publish the performance of the institution generally and on specific projects, the Council will, as far as possible, rely on the data and information used by the institution for its own purposes.
10 The Council will allocate and pay grant to the institution in accordance with current published policies and procedures. The institution will be consulted in advance and given reasonable notice of any significant change to these policies and procedures and of significant changes in overall funding levels.
11 The accountable officer of the Council is required to be satisfied that the institution has put in place the organisation and procedures necessary to ensure compliance with this memorandum, including the achievement of best value from funds derived from Scottish Ministers. The Council will obtain evidence from the institution, which will include undertaking reviews (but only by prior arrangement), to provide the assurances required to discharge this responsibility.
12 Where the Council has concerns or insufficient information to provide the assurance required, the Council will, in the first instance, seek to resolve matters with the chief executive officer of the institution. Where this has not proved possible, the Council’s accountable officer will inform the chair of the governing body and the institution’s chief executive officer in writing and without delay of any significant concern of the Council about the conduct of the institution. Only after such notification and where the circumstances warrant it, the Council’s accountable officer may suspend the payment of any or all grants to the institution. Where the concern relates to the financial support which the institution receives (or might receive) from the Council, the Council may also use its powers to attend and address a meeting of the governing body.
What the Council can expect of the institution
13 The following paragraphs state the expectations of the institution and the requirements which are a condition of the Council’s funding.
14 The Council must be able to rely on the whole system of governance, management and conduct of the institution to safeguard all funds of the institution deriving from Scottish Ministers and to achieve the purposes for which those funds are provided. As a recipient of public funds, the governing body of the institution will strive to achieve at all times good practice in the governance, management and conduct of the institution.
15 The governing body will ensure that it has in place and effectively implemented the proper arrangements for governance, leadership and management of the institution as required by statute, its instrument and articles of governance. This includes the appointment of the chief executive officer. As well as being directly accountable to the governing body for the proper conduct of the institution’s affairs, the chief executive officer of the institution is also directly accountable to the chief executive officer of the Council for the institution’s proper use of funds deriving from Scottish Ministers and its compliance with this memorandum.
16 Respecting the primacy of the institution’s own statutory and constitutional obligations, the governing body will ensure that:
(i) there is effective planning and delivery of the institution’s education programmes, research and related activities, in accordance with its mission;
(ii) it obtains sufficient data and information of a quality to enable it to determine how well the institution is achieving its goals across the full range of its activities and that the institution is adjusting its strategies as necessary for the delivery of these goals. Such information will be made available to the Council on request as necessary for the exercise of its statutory functions;
(iii) public funds are used in accordance with relevant legislation and only for the purposes for which they are given;
(iv) the institution strives to achieve best value from its use of public funds from all sources;
(v) the institution takes appropriate account of Scottish Ministers’ priorities as expressed in the Council’s further and higher education policies and drawn to the institution’s attention by the Council;
(vi) the institution is actively engaged in seeking continuously to enhance the quality of its programmes and services and to involve students and other stakeholders in these processes;
(vii) there are in place up-to-date and readily accessible procedures for handling complaints by students, staff and others;
(viii) its and the institution’s activities are conducted in an appropriately open, transparent and fully accountable manner;
(ix) the institution plans and manages the deployment of its resources in a sustainable way;
(x) it and the institution adheres to the Council’s mandatory requirements (as notified to the institution in circular letters) and that the institution takes account of relevant good practice in the management of all its activities and resources including its:
- staff, human resources and industrial relations practices;
- estates and equipment; and
- finances, and risk and internal control procedures.
17 The chief executive officer of the institution must inform the accountable officer of the Council without delay of any circumstance that is having or is likely to have a significant adverse effect on the ability of the institution to maintain its capacity to deliver relevant education programmes, research and related activities.
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Mandatory requirements
Mandatory requirements for Scotland's colleges and universities