This is the time of year when universities will be preparing their annual audited financial statements.

It is a mandatory requirement of HEFCE that those universities which are exempt charities include in those financial statements a statement that the university has had regard to the Charity Commission’s guidance on public benefit, and also a report on how the university has delivered its charitable purposes for the public benefit.

That requirement is contained in Annex H of the model financial memorandum.

Those universities which are registered charities must include in their trustees’ annual report a statement that they have had due regard to the Charity Commission’s public benefit guidance and information about how they have delivered their charitable purposes for the public benefit.

The provisions are not quite identical but they essentially impose the same obligations.

When compiling the necessary information, it should be noted that the Charities Act 2011 is now in force and reference needs to be made to it, rather than to earlier Charities Acts.

Also, the Charity Commission’s guidance on public benefit was amended in December 2011. The trustees will no doubt notice this when they “have regard” to the guidance. It should be noted that it is a university’s trustees (the members of its governing body or, if it is a company, its directors) who have to confirm that they have had regard to the guidance. It is not sufficient for the members of the senior management team alone to have regard to that guidance.

The precise manner in which a university reports on its delivery of public benefit is primarily a matter for individual universities to decide.

For reporting purposes, a university needs to demonstrate how it delivers its charitable purposes for the public benefit by reference to its objects as set out in its governing document. A university may well engage in activities which are outside its objects and which may well be for the public benefit. However, reporting on those activities does not satisfy the relevant reporting requirements.

It is necessary to be clear about who benefits from a university’s core charitable objects. Both undergraduate and postgraduate students will clearly be beneficiaries but, where research is concerned, it may be more difficult to identify who the beneficiaries are. It may be that they are the public generally or a more focused and definable group.

Guidance can be found on the HEFCE website and a review of public benefit reporting by reference to universities’ reports in their 2009/10 financial statements contain some useful do’s and don’ts. It also contains details as to how the quality of reporting might be assessed.

The relevant link is:

It appears that most universities are complying reasonably well with their reporting requirements but it is worth emphasising that references now need to be made to the Charities Act 2011 and that the Charity Commission’s guidance on public benefit has recently changed.