Last Friday was the deadline for English universities to file financial forecasts with the funding council. Not all met the deadline. With a cash crisis looming, THES reporters look at the sums and who carries the can when they do not add up

The English funding council's revised financial memorandum spells out the responsibilities of institutions and their governors.

It says: "The governing body of the institution shall ensure that it has a sound system of internal financial management and control.

"The governing body of an institution shall plan and conduct its financial and academic affairs to ensure that it remains solvent and that, taking one accounting period with another, its total expenditure is not greater than its total income."

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In meeting these requirements, it adds, the institution "shall not have an historical cost deficit in two consecutive accounting periods unless there are sufficient discretionary reserves to cover the deficit. A deficit of less than 0.5 per cent of total income . . . or Pounds 500,000, whichever is the lower, will not be taken into consideration for these purposes.

"Negative discretionary reserves must be cleared by the end of the third accounting period after the year in which the deficit began to accumulate.

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"The council may, in its discretion, waive these conditions and substitute others on written application from the institution."