Annual report of the directors
1 The directors present their
report and the audited financial statements for the year 1 August 2006 to 31 July 2007 for The Quality Assurance Agency for Higher
Education (QAA). This report has been prepared in accordance with the company’s
Memorandum and Articles of Association, applicable law and the requirements of Accounting
and Reporting by Charities: Statement
of Recommended Practice (the Charities SORP), as revised by the Charity Commission in 2005.
2 The directors of the company are also its trustees under the terms of the Charities Act 1993.
Reference and administrative details
Registration numbers
Company registration number: 3344784
Charity registration numbers: 1062746 and SC037786
Registered office and other offices
QAA's registered office is Southgate House, Southgate Street, Gloucester, GL1 1UB.
QAA has offices at:
Southgate House, Southgate Street, Gloucester, GL1 1UB.
183 St Vincent Street, Glasgow, G2 5QD.
Bankers
QAA's bankers are:
Co-operative Bank plc
Gloucester Branch, 23A St Aldate Street, Gloucester, GL1 1RU.
Abbey plc
Business Banking Centre, 301 St Vincent Street, Glasgow, G2 5HN.
Solicitors
QAA's solicitors are:
Mills and Reeve,
Francis House, 112 Hills Road, Cambridge, CB2 1PH.
Auditors
QAA’s auditors are:
Mazars LLP
Clifton Down House, Beaufort Buildings, Clifton, Bristol, BS8 4AN.
QAA Board of Directors
Appointed by the Board
Mr Sam Younger (Chairman) |
Chairman, The Electoral Commission |
Dr Susan Atkins |
Interim Chief Executive, Appointments Commission |
Mrs Beverley Hunt |
Director and Independent Consultant,
BG Hunt Associates |
Mr Andrew Ramsay |
Chief Executive Officer, Engineering Council UK
|
Mr Andrew Summers CMG |
Chairman, Companies House |
Mr Robin Vaughan |
Director of Professional Standards, Chartered
Institute of Management Accountants |
Appointed by Higher Education Wales, GuildHE Limited, Universities Scotland and Universities UK
Professor Paul Curran |
Vice-Chancellor, Bournemouth University |
| Professor Noel Lloyd | Vice-Chancellor, Aberystwyth
University (appointed December 2005) |
|
Professor Michael Pittilo |
Principal, The Robert Gordon University |
Professor Joan Stringer CBE |
Principal and Vice-Chancellor, Napier University |
Professor Elaine Thomas |
Rector, University College for the Creative Arts
at Canterbury, Epsom, Farnham, Maidstone and Rochester |
Appointed by the Department for Employment and Learning (Northern Ireland), the Higher Education Funding Council for England, the Higher Education Funding Council for Wales and the Scottish Funding Council
| Professor Susan Bassnett | Pro Vice-Chancellor, University of Warwick |
Mr Nick Kuenssberg OBE |
Chairman, The Glasgow School of Art |
Professor Arthur Lucas AO CBE |
Former Principal, King's College London |
Professor Charles Munn OBE |
Chairman, Customer Contact Association |
Professor Stephen Tomlinson CBE |
Provost, Cardiff University |
No director had a beneficial interest in any contract with QAA. The directors are the trustees of the charity.
Chief Executive
QAA’s Chief Executive is Mr Peter Williams.
Structure, governance and management
Status
3 QAA is a private company limited by guarantee and a registered charity in England and Wales, and in Scotland. The liability of the members in the event of winding up is limited to an amount not exceeding £1 per member. The company’s objects and constitution are set out in its Memorandum and Articles of Association.
4 The company’s members as at 31 July 2007 are:
- Universities Scotland
- Universities UK (UUK)
- Higher Education Wales (HEW)
- GuildHE Limited.
The QAA Board of Directors
5 The QAA Board of Directors has 14 members. Four members are appointed by the representative bodies of the heads of higher education institutions (HEIs) - HEW, GuildHE Limited, UUK and Universities Scotland. Four members are appointed by the higher education (HE) funding councils for England, Scotland and Wales, and the Department for Employment and Learning in Northern Ireland. The Board appoints six independent members itself. The Chairman of the Board is drawn from the independent members. All directors are non-executive and receive no remuneration from QAA. The only payments they receive are reimbursements of travel and subsistence expenses incurred on QAA business. Directors retire from membership of the Board by rotation based on length of service. They are eligible to be reappointed on one occasion.
6 All new Board members are required to attend an induction day at QAA’s offices in Gloucester. The induction has four main purposes: understanding the nature of the organisation and its business; understanding the nature of the Board member’s role; understanding QAA’s main external relationships; and getting to know some of QAA’s senior staff. New Board members are asked to evaluate the effectiveness of the induction arrangements. The arrangements are reviewed periodically by the Board’s Nominations Committee.
7 The Board held five meetings between August 2006 and July 2007.
8 Board meetings are attended by a student observer (see paragraph 21).
Mr Andre Oboler completed his second and final year as student observer in
December 2006. A sub-group of Board members met two candidates nominated by
student bodies to succeed Mr Oboler. The Board agreed to invite Mr Duncan
Connors, a postgraduate student at the University of Glasgow, to attend Board
meetings as an observer in the calendar year 2007.
Registration as a charity in Scotland
9 We completed our registration with the Office of the Scottish Charity Regulator (OSCR) as a charity in Scotland on 6 February 2007. QAA is a United Kingdom (UK)-wide body: details of our work in Scotland - and the other parts of the UK - are set out in paragraphs 33-87.
Board responsibilities
10 The Board has adopted the following statement of its primary responsibilities and has included this statement in its published Code of best practice for members of the QAA Board (Code of best practice):
- to approve the mission and strategic vision of QAA, strategic plans, annual operating plans and key performance indicators, and to ensure that these meet the interests of stakeholders
- to delegate authority to the Chief Executive for the corporate, financial, estate and personnel management of the organisation, and to establish and keep under regular review the strategies, policies, procedures and limits for such management functions
- to ensure the establishment and monitoring of systems of control and accountability, including financial and operational controls and risk management, and procedures for handling internal grievances, conflicts of interest and whistleblowing
- to ensure processes are in place to monitor and evaluate the performance and effectiveness of QAA against the plans and approved key performance indicators, which should be, where possible and appropriate, benchmarked against other comparable organisations
- to establish processes to monitor and evaluate the performance and effectiveness of the Board itself
- to conduct its business in accordance with best practice in corporate governance and with the principles of public life drawn up by the Committee on Standards in Public Life; and in accordance with the duties and responsibilities of company directors and charity trustees
- to safeguard the good name and values of QAA
- to appoint the Chief Executive, and to put in place suitable arrangements for monitoring his/her performance
- to appoint the Company Secretary and to ensure that, if the person appointed has managerial responsibilities in the organisation, there is an appropriate separation in the lines of accountability
- to be the employing authority for all staff in QAA and to be responsible for establishing a human resources strategy
- to be the principal financial and business authority of the company, to ensure that proper books of account are kept, to approve the annual budget and financial statements, and to have overall responsibility for the company’s assets, property and estate
- to be the company’s legal authority and, as such, to ensure that systems are in place for meeting all its legal obligations, including those arising from contracts and other legal commitments made in the company’s name and
- to ensure that the company’s constitution is followed at all times and that appropriate advice is available to enable this to happen.
Board effectiveness
11 The Board conducts an annual review of its own effectiveness. In the 2006 review, we asked 20 of our main external partners and stakeholders to evaluate the performance and achievements of QAA, including the Board. The Board received an initial analysis of the responses at its meeting in November 2006 and a full analysis in March 2007. This confirmed that there was broad satisfaction with the quality of our work and communications and our contribution to improvement and enhancement in the sector and to public confidence in HE; also that we conducted our work in a way that was consistent with our published values and standards.
10 years
12 The year 2007 marked QAA’s 10-year anniversary. As well as celebrating this milestone, the Board is looking ahead to the next 10 years. It has commissioned the new economics foundation (nef) to set out some thoughts and perspectives on the purposes and nature of a high quality HE in 10 years’ time. The report is due to be completed by the end of 2007 and we will discuss it with the sector and our stakeholders, both to develop the clearest possible shared picture of the medium term evolution of HE in the UK, and to stimulate thinking about QAA’s role and priorities over the next 10 years. We are also one of a number of bodies providing support for a project being undertaken by the Institute of Public Policy Research (IPPR) into the purposes, structure and funding of HE.
Register of Board members’ interests
13 The Register of Board members’ interests is updated periodically. The
Register includes the Chief Executive, the Directors of QAA’s operational
groups, and the three observers (representing government departments, the
Higher Education Academy (HEA) and students) who attend Board meetings, as well
as the Board members themselves.
It includes details of current employment, and connections with HEIs and other
bodies.
It is reviewed annually and whenever there are changes in the Board’s
membership, and is published on our website.
Board committees
14 The Board has seven committees. They advise on governance matters (Audit Committee, Remuneration Committee and Nominations Committee), QAA business in Scotland (the QAA Scotland Committee) and Wales (the Advisory Committee for Wales), applications for the grant of degree awarding powers (DAP) and university title (UT) (Advisory Committee on Degree Awarding Powers), and the management of the Access to HE scheme in England, Wales and Northern Ireland (Access Recognition and Licensing Committee). The minutes of each committee are received by the Board. All committees operate under terms of reference and with membership determined by the Board. The minutes of Board meetings are published on our website.
15 Membership of the committees is updated in the light of retirements from, and appointments to, the Board. The membership and terms of reference of all Board committees are set out in the Board’s Code of best practice.
16 The Remuneration Committee commissioned an independent external survey of the pay and performance review systems that applied to the Chief Executive and the four Group Directors. On the Committee’s recommendation, the Board adopted a revised framework for review of the pay and performance of the four Group Directors.
17 The Board re-constituted and re-launched its Advisory Committee for Wales, both to provide a forum for discussion of developments in Welsh HE, but also to allow QAA to provide a better service to HE in Wales. This initiative was complemented operationally through the establishment of ‘Team Wales’, chaired by the QAA Officer for Wales, and with an appropriately wide-ranging membership of QAA staff.
Board champions
18 At its awayday in October 2006, the Board agreed that it wished to strengthen the links between Board members and staff and the contribution that Board members could make to the conduct of QAA’s work. The 2006 staff survey showed a similar enthusiasm on the part of staff for greater involvement with the Board.
19 The Board has therefore adopted a ‘Board champions’ scheme to allow Board members to take an individual interest, at the strategic level, in specific areas of QAA’s work and organisation, through direct contact with the relevant QAA staff. The Board members will also act as ‘champions’ in Board meetings and be able to provide greater reassurance to the Board as a whole about the effectiveness of particular areas of work, based on the expertise and knowledge they will build up. The Board champion(s) will also be available as a sounding board and source of advice on any new strategic developments or emerging issues. A Board champion does not exercise any operational or managerial responsibility.
Ninth Annual General Meeting of the members of the company
20 The ninth Annual General Meeting was held in November 2006. It received
and adopted the Directors’ report and financial statements for the year ended 31 July 2006,
with the auditors’ report thereon. It resolved to reappoint Mazars LLP as QAA’s
external auditors for a further year. It resolved, with the consent of the
Charity Commission, to make a number of wording amendments to the company’s
Memorandum and Articles of Association, mainly to update the names and titles
of organisations.
Memorandum and Articles of Association
21 The company’s Members approved by Written Resolution, in summer 2007, on
the recommendation of the Board, and with the consent of the Charity Commission
and OSCR, some further amendments to the company’s Memorandum and Articles of
Association.
The changes to the Memorandum were designed to widen the statement of QAA’s objects
in recognition of our increasing international work and opportunities for
broadening QAA activities; to remove restrictions on QAA powers; and to create
the powers to establish a trading subsidiary should that be required. The
changes to the Articles were made in order to make provision for a student
member of the Board. The first student member will be appointed from January
2008.
Annual reception
22 The QAA annual reception was held on the evening of 14 March 2007 at the offices of Swiss Re Insurance, 30 St Mary Axe (‘the Gherkin’) in London. As a celebration of, and reflection on, QAA’s 10-year anniversary, Lord Dearing spoke about the past 10 years, and the Chief Executive gave a perspective on the future. Over 100 guests from HEIs; professional, statutory and regulatory bodies (PSRBs); public bodies and government departments; and previous and current Board members, were present.
Subscribers' meeting
23 We held our annual Subscribers' meeting in June 2007 in London. The annual meeting provides a good opportunity to update the universities and colleges on aspects of our work and for us to receive feedback from them. This year the main focus was on quality enhancement (speaker Professor Paul Ramsden, Chief Executive of the HEA), regulation in the HE sector (Mr Jim Port of JM Consulting), and a session based on stimulus materials provided by nef to identify and discuss possible or desirable characteristics of HE in 10 years’ time.
Risk management
24 Our approach to the management of risk is based on distinguishing between operational risks and strategic risks, and having clear lines of responsibility for identifying, managing and monitoring each type of risk.
25 Strategic risks relate to the nature and purposes of QAA, our ability to achieve our mission, the environment we work in, our competitors, satisfying our stakeholders' needs, our response to opportunities and threats, our vulnerability to political shifts, and the solidity of our reputation and standing. The QAA Executive and Board are responsible for identifying and managing strategic risks. The main areas of strategic risk are summarised in our strategic plan and, in more detail, in the Strategic Risk Register.
26 Our key approaches to managing strategic risk include adaptability and responsiveness, working in partnership with stakeholders to understand and meet their needs, developing our own expertise, analysing and disseminating the enhancement value in our work, demonstrating the benefits of what we do, and adjusting what we do and how we do it as circumstances alter. Quality assurance is a dynamic area and QAA changes with it.
27 Operational risks are primarily to do with the day-to-day conduct of our business (reviews, the Academic Infrastructure, DAP and UT, publication and dissemination, liaison and support) or the management of the organisation (governance, staffing, resourcing, office systems). Operational risks are managed at local level by each of QAA's five operational groups, with quarterly reports to the Executive. The main areas of operational risk are set out in each year’s published Annual operating plan.
28 During the year the risk management policy and guidelines were reviewed, amended and endorsed by the Audit Committee. The Strategic Risk Register was updated and represented to the Audit Committee and the Board. The Board has determined to receive an annual report on strategic risk management. No significant risks, strategic or operational, impacted on our work in 2006-07.
Key performance indicators
29 The Board is considering the development of a structure of key indicators and techniques that will allow it to measure and assess QAA’s performance more effectively. Routine operational monitoring will remain with the Executive as part of the quarterly monitoring structures that are well established and ensure that QAA’s contract and subscription work is delivered to time and at the agreed quality and price. The Board’s focus is on strategic matters – assessing the extent to which we are achieving the purposes for which QAA was established, the impact we are having, and the ‘difference’ we are making. The Board will work on proposals for gauging QAA’s impact and strategic achievement during 2007-08.
Business continuity
30 Our business continuity capacity was tested to the limit following the torrential rains and floods in Gloucester and surrounding areas in July 2007. With no useable water for 10 days and no mains power in our offices for several days, there were unavoidable disruptions to our work. However, the commitment of the business continuity team, the adaptability of staff, and the robustness of the communications and contingency arrangements that were already in place, all ensured that disruptions were kept to a minimum and business was able to continue largely as normal.
Chief Executive
31 The Chief Executive is responsible for the leadership, executive management and day-to-day direction of QAA’s work, within the overall strategic direction that is set by the Board. He is accountable to the Board for the overall organisation, management and staffing of QAA and for our procedures in financial and other matters, including conduct and discipline. This includes promoting by leadership and example the values embodied in the Nolan Committee's seven principles of public life. The Chief Executive is accountable to the Board for the propriety and regularity of QAA’s finances, for keeping proper accounts, for prudent and economical administration, for avoiding waste and extravagance, and for the efficient and effective use of resources. He has a responsibility to see that appropriate advice is tendered to the Board on all these matters.
Organisational structure
32 QAA is organised into five operational groups. The
Chief Executive leads the Chief Executive’s Group which includes the corporate
affairs and international affairs functions.
The other four Groups are each headed by a Group Director:
- Reviews Group - all of our review and audit activity in England, Wales and Northern Ireland; liaison with Northern Ireland and Wales; and some international work
- Development and Enhancement Group - institutional liaison scheme; work with PSRBs, students and employers; intelligence, good practice and enhancement; maintenance and development of the Academic Infrastructure; and some international work
- QAA Scotland - all aspects of our work in Scotland (from the Glasgow office) and some international work
- Administration Group - aspects of our work with
students; all aspects of central services and organisational infrastructure,
including finance, communications,
human resources, premises, business development, office services and information management and systems.
Objectives and activities
Objects
33 QAA’s objects, as set out in its revised Memorandum and Articles of
Association
(see paragraph 21), are:
- the promotion and maintenance of quality and standards in higher education in the UK and elsewhere
- the enhancement of teaching and learning, and the identification and promotion of innovation and good practice in teaching and learning
- the provision of information and the publication of reports on quality and standards in higher education in the UK and elsewhere
- the provision of advice to governments, as requested, on access course recognition and in relation to all or any of the above objects.
Mission and purposes
34 QAA’s mission is to safeguard the public interest in sound standards of higher education qualifications and to inform and encourage continuous improvement in the management of the quality of higher education.
35 To achieve our mission, we work in partnership with the providers and funders of higher education, the staff and students in higher education, employers and other stakeholders, to:
- safeguard the student and wider public interest in the maintenance of standards of academic awards and the quality of higher education
- communicate information on academic standards and quality to inform student choice and employer understanding, and to underpin public policy making
- enhance the assurance and management of standards and quality in higher education and promote a wider understanding of the value of well-assured standards and quality
- promote a wider understanding of the nature of standards and quality in higher education, including maintenance of common reference points, drawing on UK, other European, and international practice.
Strategies
36 QAA is a UK-wide body and we have a wide range of partners, stakeholders and users of our services: universities and colleges; students; PSRBs; other public bodies; employers; funding bodies; government departments; and the general public. We have a correspondingly wide range of strategies and approaches to satisfy that diversity:
- reviews and audits of the standards and quality of HE across the UK, including HE provision offered collaboratively between UK HEIs and partners, whether in the UK or overseas
- publication of reports arising from those reviews and audits
- commentary on the accuracy of the public information that institutions make available about the standards and quality of their provision
- development, maintenance and promotion of the Academic Infrastructure - qualifications frameworks, subject benchmark statements, the Code of practice for the assurance of academic quality and standards in higher education (the Code of practice), and programme specifications
- enhancement activities designed to assist institutions in managing their responsibilities for the standards and quality of the education they provide - briefings, publications, meetings, events, collaborative work with stakeholders and partners, analysis and dissemination of the outcomes of reviews and audits and their evaluations
- further development, implementation and review of the Quality Enhancement Framework in Scotland
- liaison, collaborative work, information-sharing and briefing with a wide range of key partners and stakeholders, including the National Union of Students (NUS), NUS Scotland, NUS Wales, National Postgraduate Committee and the Association for Managers in Students' Unions (AMSU); employers; funding bodies; subject bodies; and PSRBs
- participation in European and other international activities - the Bologna process, the European Association for Quality Assurance in Higher Education (ENQA), the International Network for Quality Assurance Agencies in Higher Education (INQAAHE), conferences, seminars, overseas visitors, projects, briefings - and support for the UK HE sector in relation to international developments
- consideration, report and recommendations (to governments) on applications for the grant of DAP, UT or designation as a HEI
- management of the QAA Recognition Scheme for Access to Higher Education in England, Wales and Northern Ireland.
The objectives in 2006-07
37 Each year we prepare and publish an annual operating plan setting out
the objectives, tasks, performance measures and desired outcomes from the
year’s work. In summary,
the objectives in 2006-07 included the following:
- conduct of contracted review and audit programmes across the UK
- development and implementation of revised and new review and audit methods
- advice to governments on applications for the grant of DAP and UT
- review, renewal and management of the Access to HE scheme
- maintenance and updating of the Academic Infrastructure
- strengthening our contribution to institutions’ enhancement work through our review methods, through the analysis of review outcomes, through the enhancement themes, and through dissemination, publication and promotion
- contribution to a wide range of European and other international activities
- greater investment in our work with and for students and student representative bodies
- the further development and consolidation of our contracting and business development capacity
- stronger relations with employer bodies, sector skills councils and PSRBs
- implementation of our Higher Education Regulation Review Group (HERRG) Concordat action plan.
Achievements and performance
38 Our Annual operating plan 2006-07 and budget were determined in the light of the mission, purposes and objectives set out in the Strategic plan 2006-11. Those objectives are grouped under five strategic themes - safeguarding standards; supporting and enhancing quality; offering expertise; rationalising regulation; and working worldwide. This section of the report follows that five-part structure and summarises our main achievements in 2006-07. This structure has been chosen to provide details of activities to comply with the requirements of the Charities SORP, and is also used in the financial statements. The final part of this section comments on our organisational development objectives in the year.
Safeguarding standards
Objectives
- Maintenance and updating of the Academic Infrastructure.
- Conduct of review and audit programmes and publication of reports.
- Development of new audit and review methods.
- Advice to governments on applications for DAP and UT.
- Renewal of the Access to HE scheme in England, Wales and Northern Ireland.
Achievements
39 The Academic Infrastructure sets the framework within which academic standards and quality can be expressed and understood. It has a number of elements - the Code of practice; the frameworks for higher education qualifications in England, Wales and Northern Ireland, and in Scotland; subject benchmark statements; and programme specifications. It provides a structure of reference points that inform our reviews and audits of academic standards and quality.
40 In England and Northern Ireland, we carried out and reported on seven institutional audits and eight collaborative provision audits in HEIs. The programme of mid-cycle follow-ups for institutions audited in earlier years was started (45 in total). Arrangements for the full implementation of the revised institutional audit method in England and Northern Ireland were finalised, including agreement on the schedule of reviews over the six years and briefing meetings with the institutions that would be audited in 2007-08. The programme of collaborative provision audits is now completed, and its future is currently under consideration in the Quality Assurance Framework Review Group (QAFRG) in England which is due to report in April 2008.
41 In England, we completed the final round of academic reviews of HE provision in further education colleges (FECs) (13 reviews and four re-reviews) and completed the Foundation Degree review programme (one previously postponed review and nine follow-ups from previously completed reviews).
42 In Scotland, five enhancement-led institutional reviews (ELIRs) and two academic reviews were completed, as well as an observation of an internal subject review in a Scottish HE college. We also completed a review and made a recommendation on an application for designation as an HEI.
43 In Wales, three institutional reviews were completed. The reports of two other completed reviews will be published in autumn 2007. The current cycle of institutional reviews in Wales will be completed in 2008-09; preliminary discussions about evaluating the review method for future needs have started.
44 The ten individual reports and an overview report arising from the audit of UK collaborative links with the People’s Republic of China were published in autumn 2006. In spring 2007, we carried out an audit of overseas partnership links with Russia (four links) and Hong Kong (six links).
45 The overview reports arising from the review of research degree programmes in England, Northern Ireland and Wales, carried out as a precursor to incorporating research degree programmes into the institutional audit and review methods, were published in February 2007.
46 Twenty-seven applications for the grant of DAP or UT were under consideration during the year. Recommendations in respect of 12 applications - including a successful application for taught DAP from outside the publicly-funded HE sector, in line with the 2004 criteria - were put to government departments. We also advised government on the development of criteria and processes to scrutinise applications from FECs for the grant of powers to award Foundation Degrees. It is expected that those procedures will be implemented during 2007-08.
47 In Access to HE, four licence applications for recognition as an access validating agency (AVA) and five AVA reviews were completed. The new Access to HE Diploma was launched in June 2007 with the publication of A student guide to the Access to HE Diploma. Following formal consultation, the model for grading the Diploma, and the process for testing the model, have been agreed. We have amended the guidance on admission to Access to HE courses in the light of government legislation on age discrimination. The annual Key statistics report was published in June 2007, and it has been agreed that QAA will take over the management of the Access to HE database from the Universities and Colleges Admissions Service (UCAS) during 2008.
48 In Scotland, the first cycle of ELIR reviews was completed in summer 2006 and the external evaluation team from the Open University and the University of Lancaster presented its report in the autumn. The report was overwhelmingly positive about what had been achieved and the culture change that was being brought about through an enhancement-led approach. The Scottish Funding Council (SFC) appointed a Joint Quality Review Group (JQRG) to review the Quality Enhancement Framework in Scotland following completion of the first cycle of ELIR reviews. The JQRG’s work continued through the year, and the elements of an amended framework, to be implemented from 2008-09, were identified by summer 2007 for further detailed implementation work by the sector and QAA. Learning from ELIR 2003-06 was published in May 2007. An ELIR conference was held in Glasgow in June 2007 to reflect on the outcomes of the completed cycle and to look ahead to the revised method.
49 The 2005 QAFRG review of QAA’s 2002-05 institutional audit process in England and Northern Ireland recommended that ‘the possibility of an academic review being triggered through an institutional audit or other agreed good cause should be retained. Where QAA has serious and substantiated concerns about an institution’s management of quality and standards, an appropriate review should be triggered.’ As QAA no longer routinely undertakes any academic reviews of subjects in HEIs, and as the time between audits has been extended to a six-year schedule, QAFRG, the Higher Education Funding Council for England (HEFCE), the former Department for Education and Skills (DfES) and QAA jointly agreed that we should develop a procedure for identifying and handling ‘causes for concern’. This is published on our website, and took effect from 1 March 2007. It applies to all QAA’s subscribing institutions, irrespective of whether they are funded by HEFCE. The main principles underpinning the procedure are twofold: first, that the power to declare a possible ‘cause for concern’ should be limited to named groups, principally statutory, regulatory, and some professional bodies; and secondly, that any response by QAA to a request from one of those groups to investigate an apparent difficulty should be phased and proportionate, beginning with an informal enquiry and only progressing to a full investigation where this is considered to be necessary in the light of evidence gathered.
Supporting and enhancing quality
Objectives
- Maintenance and updating of the Academic Infrastructure.
- Strengthening our contribution to institutions’ enhancement work through our review methods, through the analysis of review outcomes, through the enhancement themes in Scotland , through the dissemination and publication of intelligence, and through institutional liaison and collaborative work with the sector and stakeholders.
- Greater investment in our work with student bodies across the UK.
Achievements
50 The QAA enhancement strategy has a number of components: to support academic standards and their quality assurance through maintenance, updating and enhanced application of the Academic Infrastructure; to support continuous improvement in institutions’ quality assurance systems and in external audit and review activities; and to contribute to, stimulate and sometimes lead on national and international developments and projects. Under this umbrella, there is a broad portfolio of work including review and revision of the frameworks for HE qualifications and the subject benchmark statements, managing the subject benchmarking scheme, updating of the Code of practice, development of the Outcomes from institutional audit series and the Enhancing practice series of publications, the institutional liaison scheme, and an extensive range of collaborative and project work with institutions, students and stakeholders. Fourteen open consultative and discussion meetings were held, attracting over 600 participants. Enhancement continues to become an increasingly important and influential part of our overall portfolio of work.
51 The frameworks for HE qualifications evolve in the light of experience of their use, the development of new qualifications, the development of systems of academic credit, and their relationship with other qualifications frameworks including European developments. QAA is fully engaged in the maintenance and updating of The framework for higher education qualifications in England, Wales and Northern Ireland (FHEQ) and The framework for qualifications of higher education institutions in Scotland . QAA took the lead on behalf of the sector in Scotland in achieving self-certification of the Scottish HE qualifications framework within the Bologna process framework. We have been asked by the Department for Innovation, Universities and Skills (DIUS) to undertake the self-certification of the England, Wales and Northern Ireland FHEQ against the qualifications framework of the European Higher Education Area.
52 The process of reviewing the sections of the Code of practice in the light of developments since they were first published is continuing. The revision of two sections was completed in 2006-07 and published in October 2007. Work has started on reviewing and revising further sections.
53 Over 80 subject benchmark statements are published on our website. The Recognition scheme for subject benchmark statements provides the means to support subject communities that wish to take a benchmarking initiative in subjects or at levels not benchmarked so far, or wish to update current subject benchmark statements. We consulted on over 40, mainly revised, benchmark statements in 2006-07, including a number that are Scotland-specific.
54 In Scotland , work on the Enhancement Themes programme is proceeding under the aegis of the Scottish Higher Education Enhancement Committee which was established by the sector in Scotland to manage the development of the Themes and to support institutional management of enhancement. The annual Enhancement Themes conference was held over two days in March 2007, with over 350 participants. Four issues of the Enhancement Themes Newsletter were published during the year, plus four Enhancing practice guides arising from the Integrative Assessment theme. Four themes are currently ‘live’: The First Year; Flexible Delivery; Integrative Assessment; and Research-Teaching linkages. Information on the outcomes of the first Themes and progress on current work is published on the Enhancement Themes website.
55 Over 120 audit and review reports (institutional audit and review, academic review, enhancement-led institutional review, Foundation Degree review, Major Review, overseas audit and collaborative provision audit) were published in 2006-07. A further nine reports in the Outcomes from institutional audit series were published in the year. These are based on thematic analysis of the findings in institutional audit reports to identify the sector-wide emphases and messages, and provide prompt and focused feedback and intelligence to the universities and colleges. An interim report Learning from ELIR 2003-06 was published, drawing on and integrating the intelligence from ELIR reports and the Enhancement Themes work. We also published two overview reports - one for Wales , and one for England and Northern Ireland - arising from the 2006 review of research degree programmes.
56 We launched Quality matters during 2006-07. This is a series of occasional briefing papers designed to promote debate about quality assurance and enhancement. The first two papers - Who killed what in the quality wars? and The classification of degree awards - are published on QAA’s website.
57 All QAA publications are available on the website and most are available in printed copy. Work is continuing to ensure that all our publications are in a form and language that meets the needs of a range of audiences. In the new institutional audit method, the report is now structured in three parts: the main outcomes are provided as a Summary and Report, in non-technical, accessible language suitable for a general readership; the full details of the auditors’ commentary, findings and recommendations, that are most useful to the institution concerned, are set out in a detailed annex.
Offering expertise
Objectives
- Greater investment in our work with student bodies across the UK .
- Consolidation of our contracting and business development capacity.
- Development of stronger relations with employer bodies and PSRBs, and provision of services to HE stakeholders, including the PSRBs.
- Implementation of the HERRG Concordat.
Achievements
58 The Communications strategy was re-developed in 2006 in line with the priorities and ambitions in the Strategic plan 2006-11. The first year action plan has been achieved. Demonstrating and promoting the benefits of our work and the expertise that we can offer are major themes in the strategy.
59 All institutions that wish to be part of the institutional liaison schemes receive at least one interaction each year. Liaison provides a two-way channel for intelligence on good practice or emerging issues that can inform QAA’s quality enhancement agenda. The third liaison conference was held in May 2007. An annual report is published on the website.
60 We work closely with students and their representative organisations. We publish information that is useful to students. We have been actively engaged since QAA’s establishment in a variety of training and briefing events with the NUS, NUS Scotland, NUS Wales, individual students’ unions, the National Postgraduate Committee and AMSU. We work with the student participation in quality Scotland (sparqs) initiative. There are proposals to set up student focus groups to inform future publications in the Learning from… series. Our institutional audit and review processes provide greater and more explicit student involvement than previous audit/review processes, and in Scotland there is a student member of the review team. The QAA Board of Directors and the QAA Scotland Committee benefit from having a student presence at their meetings.
61 During 2006-07, we moved to strengthen this area of our work. In March 2007 the Board received a presentation from the NUS Vice-President for Education on the student perspective on quality assurance. The Board discussed with the student representatives the various ways in which students can be and are involved in assuring the quality and standards of HE, and the different forms of QAA engagement with students in the different parts of the UK and the issues that arose. The discussion was informed by detailed briefing papers on the extent of QAA’s current work with students and the impact of, for example, the student written submission (SWS) that is provided to an audit team by an institution’s students, and student membership of ELIR teams in Scotland . The Board also gave preliminary consideration to a draft strategy for our future work with students. It has agreed that we should work towards having student membership of all institutional audit and review teams. A QAA-internal working group has been established and resourced with the specific brief to review and strengthen QAA’s overall support for students. Also, the company’s Members have agreed (see paragraph 21) that the Board membership should be increased to include a student member (previously observer).
62 Although we work closely with current students, awareness of QAA among potential students needs to be strengthened. There has been dialogue with information, advice and guidance workers to help focus on the needs of potential students. We designed a QAA information poster for schools, which was distributed to all UK schools and colleges with sixth forms, and careers organisations.
63 We have continued to strengthen employer links, whether through liaison with the UK Inter-Professional Group, Confederation of British Industry, Institute of Directors, Engineering Council, the regional development agencies and the sector skills councils, or through employer involvement in working groups, round table meetings and conferences. We have also worked closely with the Council for Industry and Higher Education and other business/education interests, including Foundation Degree Forward and Manchester Enterprise. Work-based learning (WBL) is an increasingly important element of government agendas across the UK . We are supporting HEFCE in its WBL initiative and working with the WBL Forum in Scotland .
64 We work closely with the HEIs and their representative bodies, and other public bodies, in a series of round table events designed to provide opportunities for HE staff and institutions to discuss and consider a wide range of topics, including the diversity of institutional practices concerning external examining; the implications of credit accumulation and transfer systems for the management of quality and standards; the implications of credit-based funding; implications of the Teaching Quality Information requirements and the National Student Survey the maintenance and updating of the Code of practice and the other elements of the Academic Infrastructure; the preparation of programme specifications for public information, and their use in internal review and external audit, and the range of approaches and level of data used or required. We have provided considerable support to the work of the Measuring and Recording Student Achievement Steering Group (the Burgess group) in developing an academic credit scheme for HE in England and we will continue to support the Group in the next phase of its work. Similarly, we provide support for the Credit and Qualifications Framework for Wales and the Scottish Credit and Qualifications Framework (SCQF).
65 We have a successful track record of developing review methods to meet the needs of external stakeholders and partners and conducting review programmes under contract with those stakeholders. The programme of Major Review and subject benchmarking under contract with the Department of Health in England - in partnership with Skills for Health, the strategic health authorities, the Health Professions Council, and the Nursing and Midwifery Council - started in 2003-04. The final two Major Reviews were completed in 2006-07 and we published the Final review trends report 2003-06 in spring 2007. This provided a comprehensive overview of the method used, the principal outcomes, and the issues identified. Under the terms of a contract with the General Osteopathic Council (GOsC), we carried out eight reviews in schools of osteopathy in England in 2006-07 and managed the development of a subject benchmark for osteopathy. The GOsC contract is due for renewal in 2008.
66 We are negotiating with the Government of the Hong Kong Special Administrative Region to undertake a comparative review of veterinary education in China, Taiwan, Europe and the UK .
67 We have strengthened our capacity to manage a wider
range of contract business, with an initial focus on developing relationships with PSRBs where there is
considerable scope for rationalising the different regulatory bodies' demands
on institutions, using QAA’s expertise as the ‘hub’. The necessary systems and
processes have been put in place to support the identification, costing,
tendering and management of new business opportunities,
consistent with our charitable purposes. The Charity Commission and OSCR have
consented to amendments to the company’s objects (see paragraph 21) to provide the necessary flexibility to develop this
area of our work.
Rationalising regulation
Objectives
- Implementation of the HERRG Concordat.
- Development of programmes of collaborative work with PSRBs.
- Consolidation of our working relationship with the HEA.
Achievements
68 QAA is a signatory to the Concordat prepared by HERRG (May 2006). The Concordat brings together a significant number of funding, data collection, auditing, and professional bodies, including QAA, which each make ‘regulatory’ demands on HEIs. The Concordat is a means to ensure that regulation is better coordinated and managed, to the benefit of all involved. Each of the signatory bodies, including QAA, has added its own ‘Annex’ to the Concordat setting out its intentions and targets for better regulation over the next couple of years. HERRG confirmed the progress that had been made over the past 12 months at its meeting in May 2007, agreed QAA’s action plan for the next 12 months, and encouraged the PSRBs to review their regulatory needs in light of the work of QAA.
69 One of the ways in which QAA can contribute to better regulation will be through collaborative work with PSRBs, drawing on the expertise that we can offer and our successful track record. The more that PSRBs’ needs can be met through our work, and vice versa, the more effective and proportionate will be the overall regulatory framework for HE. We have signed Memoranda of Understanding with four PSRBs to establish a framework for collaborative work, and we intend to convene a larger group of possible PSRB partners to take the discussion forward.
70 Having carried out and published a thorough Regulatory Impact Assessment, we consulted in 2005-06 on a revised method for review of HE in FECs in England . A pilot programme of integrated quality and enhancement reviews (IQER) was carried out in 15 FECs in 2006-07. Subject to evaluation of the pilots, the IQER programme will go live in January 2008, with a five-year programme of reviews involving nearly 300 FECs. Our partners in Northern Ireland and Wales have taken this opportunity to consider their needs for external quality assurance of the HE that is offered in their FECs. We are in discussion with our partners in both countries to specify methods and processes. In Wales ,a draft operational description was developed for comment in spring 2007; a draft handbook was prepared in October 2007.
71 The SCQF was managed up to 2007 on a partnership basis by five bodies in Scotland, including QAA. All the partners agreed that it would be sensible to put the SCQF on a more formal and firm constitutional footing, and ‘Scottish Credit and Qualifications Framework Partnership’ (SCQF Partnership), a company limited by guarantee and registered as a charity in Scotland (number SC311573), was incorporated on 7 November 2006 (with QAA as one of its Members). The transfer of functions and staff from QAA took place in July 2007. The transfer of the lease for the SCQF Partnership offices is due to be completed by the end of 2007. QAA will continue to provide support during the transfer.
72 QAA and the HEA continue to strengthen their working relationship. An extensive programme of liaison, joint projects and mutual support is in place, together with periodic meetings at the level of the senior executive groups. Each Chief Executive attends the meetings of the other body’s Board as an observer.
Working worldwide
Objectives
- Contribution to European and other international developments.
- Contribution to Bologna Process developments.
- Representation of UK interests in international forums.
- Development of memorandums of understanding with overseas bodies.
Achievements
73 QAA is active in ENQA and INQAAHE. We have good relations with a number of other European agencies and maintain close contact with DIUS, as the lead government department on the Bologna process. We gave evidence to the select committee enquiry into the Bologna process. We were represented on the Steering Committee that organised the Bologna fifth Ministerial conference in London in May 2007, and have taken part in the UK Steering Committee for the Organisation for Economic Co-operation and Development thematic review of tertiary education. We also work closely with the international teams of other partner bodies, such as the Europe Unit. The Chief Executive was elected President of ENQA in September 2005 and represents ENQA on the Bologna Follow-up Group. He was re-elected President of ENQA in September 2006 and 2007. Norman Sharp, Director of QAA Scotland, also joined the INQAAHE Board in 2007.
74 The Board has endorsed the growing importance of our international work for UK HE. We have strengthened our capacity to report, advise and brief the sector and partner bodies on European and other international developments. The Quality Update International newsletter is now well-established as a means of providing international news from the world of quality assurance and HE.
75 The International Collaboration team organised a symposium entitled ‘Crossing borders: towards innovation in the quality assurance of transnational education’ in May 2007. This offered the opportunity to participants and QAA staff to get together to discuss and explore trends in the provision and nature of UK transnational education, to share information on current regulatory practices in key receiver countries and regions and to explore potential questions for the future regulation of transnational education at national and international levels. As preparation for the symposium, QAA commissioned the Observatory on borderless higher education (OBHE) to review the key findings in recent reports on the internationalisation of HE. OBHE’s report on the results of that research was presented at the symposium and QAA’s Chief Executive discussed the possible outline of a certification scheme for transnational activities.
76 QAA’s international strategy was revised during 2007 in the light of developments over the past few years.
77 Forty-nine parties of international visitors were received between 1 August 2006 and 31 July 2007. This compares with 50 visits in the period from 1 August 2005 to 14 June 2006. There were 189 individual visitors and 207 different organisations from governments and universities representing 30 different countries. The parties of visitors came from Armenia (1), Australia (1), Austria (1), Bangladesh (1), Canada (1), Chile (1), China (2), Cyprus (1), Denmark (2), Dubai (1), Egypt (1), Germany (1), Hong Kong (2), Iran (1), Iraq (1), Japan (9), Korea (2), Libya (1), Malaysia (1), Namibia (2), Nigeria (1), Netherlands (1), Nepal (1), New Zealand (3), Russia (4), Saudi Arabia (2), Sweden (1), Taiwan (1),Thailand (1) and Turkey (1).The meetings/visits were held in Gloucester (20), Glasgow (6), London (22) and Luton (1).
78 Presentations have been given at international conferences in Austria, Botswana, Canada, France, Germany, Greece, Hong Kong, India, Korea, Malaysia, Russia, Spain and Switzerland.
79 The Chief Executive signed a new Memorandum of Understanding with the National Institution for Academic degrees and University Evaluation in Malaysia in February 2007. We have existing Memoranda of Understanding with the Higher Education Quality Committee of the Council for Higher Education, QAA’s counterpart body in South Africa; with the Republic of Ireland Higher Education and Training Awards Council; and with Lembaga Akreditasi Negara (National Accreditation Board) in Malaysia .
80 Arrangements are now being put in hand for a review of QAA to confirm that we meet ENQA membership criteria (principally the European Standards and Guidelines). HEFCE will act as the convener of a UK-wide steering group, chaired by a former HEFCE Board member and with representation from the NUS and the bodies responsible for the appointment of QAA Board members. This group will take forward the commissioning of a review team to undertake the review. The group began its work in autumn 2007 and the task will be completed by the summer of 2008.
Organisational development
81 We take an active approach to maintaining and improving our organisational infrastructure and capacity. In this way we can improve our services to HE providers and stakeholders, improve our support for review and audit teams, deliver our services in the most efficient and cost-effective way, and develop our strategies, policies and management capacity to meet legal requirements and stakeholder needs.
Objectives
82 The priorities in 2006-07 included:
- updating of resource strategies - communications, human resources, information, information systems, and finance
- the development of our approach to Freedom of Information
- achievement of the Investor in People (IiP) standard
- the redevelopment of electronic communication and information systems, including QAA’s operational database
- registration with the OSCR and review of the first three years of QAA’s Welsh Language Scheme.
Achievements
83 The updated resource strategies were all endorsed by the Board. Particular attention was paid to the Human resource strategy, where considerable work was needed and considerable progress made in the development and adoption of new policies and procedures - and the Information and Communications strategies. Although QAA is not a designated body under the Freedom of Information Act, the Board took a decision that QAA should work within the spirit of the Act. We published our Information publication scheme in autumn 2006 and have now largely completed the initial schedule of publications in line with the scheme. We have also reviewed our Publishing and Copyright policies.
84 Our IiP assessment was carried out over three days in July 2007. The assessment report was very positive, we achieved the standard, and we have received the Certificate of Recognition as an investor in People.
85 Under the terms of our responsibilities under the Race Relations (Amendment) Act 2000, we collect and publish data on the composition of our workforce. We have taken advice and guidance on the development of equalities legislation and the implications for QAA, and keep our policies and practices under review. We have established a working group to look at developing a single equality and diversity scheme for QAA.
86 We were successful in our application to register as a charity in Scotland. We reviewed the operation of our Welsh Language Scheme and reported to the Welsh Language Board. The Scheme will be formally re-approved in autumn 2007.
87 Following a public tender through the Official Journal of the European Union, we have put a major project in place, working with external partners, to redevelop our communications and information systems to support the continuing evolution of audit and review activity, remote working and central infrastructure functions. The new Quality Management Information System (QMIS) - our main operational database - went ‘live’ on schedule in August 2007. It will be fully implemented during 2007-08.
Financial review
88 The financial statements have been drafted in accordance with the requirements of the Charities SORP. Resources expended on charitable activities are shown split between the five strategic themes: safeguarding standards; supporting and enhancing quality; offering expertise; rationalising regulation; and working worldwide. This therefore mirrors the categories of the Directors’ report to aid understanding by readers of the financial statements. The total resources expended note (note 3 to the financial statements) splits these categories down further and includes an allocation of support costs across the themes.
89 QAA's 2006-07 activities were funded primarily through contracts with the HE funding bodies and subscriptions from HEIs. Additional income was generated through DAP and UT applications, conferences and investment income.
90 QAA's deficit for the year ended 31 July 2007 was £195,786 (2006: surplus £373,643), bringing the accumulated funds at 31 July 2007 to £3,181,563.
Incoming resources
91 Total incoming resources as shown in the Statement
of financial activity (SOFA) fell by £1,787,558 (15.6%) to £9,676,858 between
2005-06 and 2006-07. This variance is predominantly due to a decrease in the
categories other contracts (£2,024,019;
75.4%)
and other related income (£124,729;
27.2%), offset by an increase in contracts
with HE funding bodies (£341,147; 7.7%).
92 The increase in income from contracts
with HE funding bodies is primarily due to an increased review programme
for HEFCW and additional enhancement work for SFC.
The variance on other contracts reflects the end of the review programme and associated work undertaken for the
Department of Health. Other related
income has decreased due to fewer applications for DAP scrutiny. Subscription
rates for HEI subscribers remained unchanged and this is reflected in the
similar subscriptions income levels
in 2005-06 and 2006-07.
Resources expended
93 Total resources expended as shown in the SOFA decreased by £1,218,129 (11.0%) to £9,872,644 between 2005-06 and 2006-07, which is primarily due to variances in two of the five charitable activities.
- Expenditure on safeguarding standards is consistent with 2005-06.
- Supporting and enhancing quality has increased by £485,593 (32.6%) since 2005-06 due to an increased level of enhancement themes work in Scotland and research analysing the outcomes of institutional audits.
- Offering expertise has decreased by £1,726,933 (59.1%) since 2005-06 due to the end of the review programme and associated work funded by the Department of Health.
- Expenditure on rationalising regulation is consistent with 2005-06.
- Working worldwide is also consistent with 2005-06.
94 A further analysis of expenditure by category is provided in the total resources expended note (note 3). This is split by expenditure type and between direct costs and support costs. Direct costs represent 67.5% of total expenditure (2005-06: 72.8%). The decrease in review activity is reflected in a decrease in review fees and other review costs (travel and subsistence, training etc). Other categories within direct costs have remained broadly similar to 2005-06.
95 Support costs represent 32.5% of total expenditure (2005-06: 27.2%) and show an increase of £185,977 (6.2%) from 2005-06.
Reserves policy
96 QAA’s Reserves policy sets the target level of reserves equal to four to six months’ fixed costs: at current levels of expenditure this sets the target level at £2.42 - £3.63 million. QAA holds reserves for three main reasons:
- to secure its long-term position
- to deliver the medium-term objectives in the Strategic plan 2006-11 by ensuring that reserve levels provide a cushion against medium-term business risks, and take full account of the costs of medium-term objectives
- to ensure that it can carry out the programme of work detailed in the next year’s annual operating plan, for example, to ensure it could survive in the short-term should agreements with key funders fail to be reached by the start of the financial year.
97 The policy allows the directors to meet their obligations under the Companies Acts and to comply with Charity Commission guidance.
98 The current level of reserves is £3.18 million and falls within the target range.
99 At 31 July 2007, QAA’s free reserves as defined by the Charities SORP were £2,383,636 (2006: £3,017,285).
Treasury management
100 The main principles underpinning QAA’s Treasury policy are to ensure that:
- QAA has adequate cash and working capital to enable it, at all times, to have sufficient funds available to achieve its business objectives
- QAA investments are secure. This is achieved by ensuring that its authorised investments reflect a risk averse and prudent attitude towards the organisations with whom funds may be deposited, and limits its investment activities to those approved
- QAA achieves the maximum return on its investments taking into account the other key principles
- QAA minimises the risk of fraud or error in its treasury management activities. This is achieved by designing suitable systems, procedures and contingency management arrangements in order to minimise the risk of fraud or error.
101 During 2006-07, QAA achieved an average rate of return of 5.21%, which is an increase from 4.54% achieved in 2005-06. The average Bank of England base rate during the year was 5.17% (2006: 4.50%). Investment income in the year has been derived by managing cash balances held with Co-operative Bank plc and Abbey plc.
102 Given QAA's current strategy of seeking to achieve a maximum return on its investments while maintaining a risk averse and prudent attitude, and given base rate changes and current market conditions, the investment rate of return was favourable.
Plans for future periods: looking forward to 2007-08
103 Our objectives and main tasks in 2007-08 are set out in detail in the Annual operating plan 2007-08. There is a good measure of continuity and consistency from year-to-year in the objectives set out in our annual plans - for example, in the conduct of reviews and audits, publication of reports, and maintenance and review of the Academic Infrastructure. At the same time, the overall emphasis of our work is shifting more towards enhancement and intelligence. The 2007-08 annual operating plan reflects some specific emphases, including dissemination of intelligence through targeted series of publications and events; assessment of the impact of the Academic Infrastructure; piloting and implementation of new review methods; continuing the process of modernising the Access to HE scheme; updating subject benchmark statements; review and renewal of the Quality Enhancement Framework in Scotland; strengthening our work with students and their representative bodies; meeting our commitments to HERRG; development of strategies for new business and transnational education; and discussions with the sector and stakeholders on perspectives and prospects for the next 10 years, following on from the nef work.
Safeguarding standards
104 Our objectives in 2007-08 are:
- to develop, evaluate and implement new review methods
- to carry out agreed and contracted audit and review programmes
- to manage the QAA Recognition Scheme for Access to Higher Education in England , Wales and Northern Ireland
- to advise governments on applications for DAP, UT and HEI designation.
Supporting and enhancing quality
105 Our objectives in 2007-08 are:
- to maintain and promote the Academic Infrastructure
- to produce reports and publications on time and to the required standard.
- to disseminate intelligence arising from QAA’s work
- to support quality enhancement and improvement.
Offering expertise
106 Our objectives in 2007-08 are:
- to maintain and strengthen our work with employers, students and student organisations, PSRBs and other stakeholders
- to influence policy-makers through expert advice.
Rationalising regulation
107 Our objectives in 2007-08 are:
- to achieve better regulation in HE
- to maintain an effective working relationships with the HEA.
Working worldwide
108 Our objectives in 2007-08 are:
- to report, advise and brief the sector on European and other international developments
- to contribute to European and other international developments.
Organisational development
109 There are a number of priorities in this area, including the development of operational and strategic indicators of performance; the full implementation of QMIS, QAA's new operational database; implementation of the business development strategy; and development of a single QAA equality and diversity scheme.
Statement of directors' responsibilities
110 Law applicable to incorporated charities in England and Wales requires the directors (who are also trustees of the charity), for the purposes of company law, to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the company at the end of the year, and of its financial activities for that period. All members of the Board are directors of the company.
111 In preparing the financial statements, the directors should follow best practice and:
- select suitable accounting policies and then apply them consistently
- make judgements and estimates that are reasonable and prudent
- state whether applicable accounting standards and statements of recommended practice have been followed, subject to any material departures disclosed and explained in the financial statements
- prepare the financial statements on the going concern basis unless it is inappropriate to presume the company will continue in operation.
112 The directors are responsible for keeping proper accounting records which disclose, with reasonable accuracy at any time, the financial position of the company and enable them to ensure the financial statements comply with the Companies Act 1985 and Charities Act 1993. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Information to auditors
113 In the case of each of the persons who are directors of the company at the date when this report was approved:
- so far as each of the directors is aware, there is no relevant audit information (as defined in the Companies Act 1985) of which the company's auditors are unaware
- each of the directors has taken all the steps that he/she ought to have taken as a director to make himself/herself aware of any relevant audit information (as defined) and to establish that the company's auditors are aware of that information.
Auditors
114 A resolution to reappoint Mazars LLP as auditors to the company will be proposed at the Annual General Meeting.
The financial statements were approved by the Board on 5 December 2007 and were signed on its behalf by:
Chairman
Date
Independent auditors’ report to the members of The Quality Assurance Agency for Higher Education
We have audited the financial statements of The Quality Assurance Agency for Higher Education for the year ended 31 July 2007 which comprise the Statement of financial activities, the Balance sheet, the Cash flow statement and related notes. These financial statements have been prepared under accounting policies set out therein.
This report is made solely to the company’s members, as a body, in accordance with Section 235 of the Companies Act 1985. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditors
As described in the Statement of directors’ responsibilities, the directors, who also act as trustees for the charitable activities of the Quality Assurance Agency for Higher Education, are responsible for the preparation of financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland).
We report to you our opinion as to whether the financial statements give a true and fair view, whether the financial statements are properly prepared in accordance with the Companies Act 1985 and whether the information given in the Directors’ report is consistent with the financial statements. We also report to you if, in our opinion, the company has not kept proper accounting records, if we have not received all the information and explanations we require for our audit, or if information specified by law regarding Directors’ remuneration and transactions with the charity is not disclosed.
We read the Directors’ report and consider the implications for our report if we become aware of any apparent misstatement within it.
Basis of audit opinion
We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the judgements made by the directors in the preparation of the financial statements, and of whether the accounting policies are appropriate to the charitable company's circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance as to whether the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements.
Opinion
In our opinion:
- the financial statements give a true and fair view, in accordance with United Kingdom Generally Accepted Accounting Practice, of the state of the charitable company’s affairs as at 31 July 2007 and of its incoming resources and application of resources, including its income and expenditure, in the year then ended
- the financial statements have been properly prepared in accordance with
the
Companies Act 1985 - the information given in the Directors’ report is consistent with the financial statements
- funds from the Higher Education Funding Council for England and from other funding bodies with whom the company has contracted during the year ended 31 July 2007 have been applied in accordance with the terms of their respective contracts.
Mazars LLP
Chartered Accountants and Registered Auditors
Clifton Down House
Beaufort Buildings
Clifton
Bristol
BS8 4AN
5 December 2007
Statement of financial activities for the year ended 31 July 2007
| Notes | 2007 |
2006 |
|
|---|---|---|---|
£ |
£ |
||
Income and expenditure |
|||
Incoming resources |
|||
Incoming resources from generated funds |
|||
Investment income - bank interest receivable |
255,667 | 244,474 | |
Incoming resources from charitable activities |
|||
Subscriptions |
3,631,550 | 3,622,700 | |
Contracts with HE funding bodies |
4,795,172 | 4,454,025 | |
Other contracts |
661,076 | 2,685,095 | |
Other related income |
333,393 | 458,122 | |
Total incoming resources from charitable activities |
2 |
9,421,191 |
11,219,942 |
Other incoming resources |
- |
- |
|
Total incoming resources |
9,676,858 |
11,464,416 |
|
Resources expended |
|||
Charitable activities |
|||
Safeguarding standards |
5,217,353 | 5,251,730 | |
Supporting and enhancing quality |
1,974,914 | 1,489,321 | |
Offering expertise |
1,195,238 | 2,922,171 | |
Rationalising regulation |
695,950 | 686,221 | |
Working worldwide |
547,163 | 525,531 | |
Total expenditure on charitable activities |
9,630,618 |
10,874,974 |
|
Governance costs |
242,026 | 215,799 | |
Total resources expended |
3 |
9,872,644 |
11,090,773 |
Net (expenditure)/income |
4 |
(195,786) |
373,643 |
Fund balances brought forward |
3,377,349 |
3,003,706
|
|
Fund balances carried forward |
3,181,563 |
3,377,349 |
All activities are continuing. There were no gains or losses other than those disclosed in the statement of financial activities. QAA had no restricted funds.
The notes on pages 33 to 43 form part of these financial statements.
Balance sheet as at 31 July 2007
| Notes | 2007 |
2006 |
|||
|---|---|---|---|---|---|
£ |
£ |
£ |
£ |
||
Fixed assets |
|||||
Tangible assets |
8 |
797,927 | 359,524 | ||
Current assets |
|||||
Debtors |
10 |
414,305 | 1,080,991 | ||
Cash at bank and in hand |
3,106,445
|
3,929,988
|
|||
| 3,520,750 | 5,010,979 | ||||
Creditors - amounts falling due within one year |
11 |
(847,114)
|
(1,703,154)
|
||
Net current assets |
2,673,636
|
3,307,825
|
|||
Total assets less current liabilities |
3,471,563 | 3,667,349 | |||
Provisions for liabilities and charges |
12 |
(290,000)
|
(290,000)
|
||
Net assets |
3,181,563 |
3,377,349 |
|||
Represented by: |
|||||
Unrestricted funds as at 31 July 2007 |
3,181,563 |
3,377,349 |
|||
The notes on pages 33 to 43 form part of these financial statements.
The financial statements were approved and authorised by the Board
on 5 December 2007 and were signed on its behalf by:
Chairman
Date
Cash flow statement for the year ended 31 July 2007
2007 |
2006 |
|
|---|---|---|
£ |
£ |
|
Net cash outflow
from operating activities |
(438,363) |
(31,774) |
Returns on investments and servicing of finance |
||
Investment income |
255,667 |
244,474 |
Capital expenditure |
||
Purchase of fixed assets |
(640,847) |
(200,093) |
(Decrease)/increase in net cash |
(823,543) |
12,607 |
| Reconciliation of net (expenditure)/income to net cash outflow from operating activities | ||
2007 |
2006 |
|
£ |
£ |
|
Net (expenditure)/income before transfers |
(195,786) |
373,643 |
Investment income |
(255,667) |
(244,474) |
Depreciation |
201,459 |
177,282 |
Loss on disposal of fixed assets |
985 |
- |
Decrease/(increase) in debtors |
666,686 |
(87,923) |
Decrease in creditors |
(856,040) |
(250,302) |
Net cash outflow from operating activities |
(438,363) |
(31,774) |
| Analysis of change in net cash | ||
2007 |
2006 |
|
£ |
£ |
|
Cash at bank and in hand at the start of the year |
3,929,988 |
3,917,381 |
(Decrease)/increase in net cash |
(823,543) |
12,607 |
Cash at bank and in hand at the end of the year |
3,106,445 |
3,929,988 |
The notes on pages 33 to 43 form part of these financial statements.
Notes to the financial statements for the year ended 31 July 2007
1 Accounting policies
a Application of accounting policies
The following accounting policies have been applied consistently in dealing with items that are considered material to QAA’s financial statements.
b Accounting conventions
The financial statements have been prepared under the historical cost convention in accordance with applicable Accounting Standards. The financial statements follow the Companies Act 1985 and the recommendations in Accounting and Reporting by Charities: Statement of Recommended Practice (the Charities SORP), as revised by the Charities Commission in 2005.
c Reporting requirements
The Companies Act 1985 requires charities to produce an income and expenditure account where the disclosure requirements of Financial Reporting Standard 3: Reporting Financial Performance cannot be met by the Statement of financial activities (SOFA). As QAA has no restricted funds and no recognised or unrecognised gains or losses, all disclosure requirements are met by the SOFA and therefore no separate income and expenditure account has been produced.
d Fund accounting
Unrestricted funds are incoming resources received or generated for expenditure on the general objectives of QAA. All QAA’s funds in 2006-07 were unrestricted.
e Incoming resources
QAA’s activities are funded primarily through contracts with the HE funding bodies and UK Governments, and through subscriptions from HEIs: it does not raise income through fundraising. All income has