Deloitte analysis of financial reporting in the UK’s higher education sector
Financial reporting by universities took a significant step forward in 2008 with the reinforcement of the requirement for each annual report to include an Operating and Financial Review (OFR), setting out a balanced assessment of a university’s performance, financial position, objectives, risks and plans for the future. A new Deloitte analysis of the first round of university financial statements since the introduction of the OFR finds that responses to the new regulations have been wide ranging.
David Hall, the Deloitte partner that leads the firms auditing practice for the education sector, commenting on the report, said: “The form and content of the OFR was not prescribed, and perhaps unsurprisingly it appears that there is a wide range of experience in terms of the content, presentation and level of detail included by universities in the first year. Universities will be comparing their
OFR’s to best practice as they pull together their annual reports for 2009. We believe that our survey will give them ideas for areas to review as they continue to improve transparency in financial reporting across the sector.
“Extended OFR reporting will improve accountability for public funds spent by the sector and ensure that all stakeholders have a far better understanding of the financial position of the universities with whom they interact, as well as the risks and uncertainties that they face.
“The OFR is an important step in improving communication with the outside world. As universities look to develop in an uncertain global economy we expect to see further improvements.”
Open Financial Reporting, Surveying Operating and Financial Reviews in the Higher Education Sector is available at www.deloitte.co.uk/heofr.
The report surveyed 40 Higher Education Institutes, 10 of which were members of the Russell Group (major research intensive universities of the United Kingdom) The combined revenue of these institutions was £7.4 billion.
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