EFA Funding Guidance for Young People 2013-2014 Reconciliation Rules

Detailed information on the reconciliation rules and examples for EFA funding guidance for young people in 2013-2014, highlighting the principles of funding adjustment, final reconciliation, and policies for charitable and commercial providers. The summary includes criteria for overperformance, underperformance, growth payments, and clawback, along with a provisional timeline.

• Funding guidance
• Reconciliation rules
• Young people
• EFA
• Principles

ioanna Follow

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1. EFA Funding guidance for young people 2013 to 2014 CCP Reconciliation 2013/14 EFA Young People s Funding Team

2. Reconciliation rules and examples The principles of CCP funding adjustment and final reconciliation are. 2 In-year payments are made on profile as is planned for all EFA 16-19 funding; in-year delivery of cash is reviewed during the year and where delivery is outside an agreed tolerance, action is taken to adjust the profile of payments from April for the remainder of the year; all funding variances are calculated by comparing total whole year delivery with the final funding allocation as paid for the year; Only cash is subject to reconciliation (not student numbers).

3. Reconciliation policy for CCPs Contract funded institutions (charitable and commercial providers known as CCPs) (rules detailed in paragraphs 22 30) 3 the following detailed reconciliation rules apply: includes disadvantage funding within overall study programme funding; tolerance for both under and over performance reduced to 2.5% of cash allocations; growth tolerance capped at 25,000; growth subject to affordability but some set aside budget in addition to any additional clawback funding.

4. Reconciliation rules and examples 4 Over performance - paragraphs 27 A tolerance of 2.5%/ 25,000 (whichever is lower) will be applied for growth payments Total programme outturn will be compared to the allocation (including TP and FPF) The cash delivered over 2.5%/ 25,000 above the allocation (together with any TP or FPF) will be paid as responsive growth subject to a growth cap and affordability. Growth payments will be limited by a cap at 100,000 or for CCPs with larger allocations the lower of 30% of the funded allocation or 1m.

5. 5 Reconciliation rules and examples Underperformance - paragraphs 25 26 A tolerance of 2.5% will be applied for clawback Total programme cash outturn will be compared to total allocation (excluding TP and FPF) The cash delivered below 97.5% of the programme funding allocation will be recovered as clawback. The following slides include a provisional timeline and some examples.

6. 6 Reconciliation timeline Data Return R06 (February 6 months data) Adjustments to Payments Growth interim payments in April for institutions achieving at least 90% of allocation Clawback only for institutions without a 2014/15 allocation or other exceptional circumstances. Where these institutions have achieved significantly less than their allocation they would face clawback from April. Other institutions reconciliation statement summarising the current level of delivery based on the R06 return. Growth interim payments in July for institutions achieving at least 100% of allocation R10 (June 10 months data) Clawback profiled from July onwards for any institutions achieving less than 90% of allocation Growth no additional payments, await audited figures R13 (September 12 months data) Clawback in October and November based on final rules (2.5% tolerance) Growth final payment in December based on final rules (2.5%/ 25,000 tolerance plus cap) R14 (October final return) Clawback final adjustments in December based on final rules (2.5% tolerance) Note: growth payments subject to affordability

7. 7 Worked Example (A1) - Allocation Programme Funding Formula - Allocation NATIONAL FUNDING RATE PER STUDENT RETENTION FACTOR AREA COST ALLOWANCE PROGRAMME COST WEIGHTING DISADVANTAGE FUNDING STUDENT NUMBERS See Table 1 from allocation 0.900 1.100 1.200 169,349 + 1,862,834 X X X X - 188,165 1,693,485 200,000 2,062,834 412,567 2,475,400 550 1,881,650

8. 8 Worked Example (A2) Allocation Table 1: Breakdown of funding for FT/PT bands Planned/timetabled Hours Student Numbers - 2013/14 Allocation 300 100 50 50 50 National Funding Rate Base Student Funding - Allocation 1,200,000 400,000 135,000 106,650 4,000 4,000 2,700 2,133 Full Time Students (at least 540 hrs) Part Time students (450-539 hrs) Part Time students (360-449 hrs) Part Time students (280-359 hrs) Part Time (up to 279 hrs) Total 1.1 1.2 1.3 1.4 1.5 Students FTEs * 4,000 40,000 10.00 550 1.6 1.7 1,881,650 * the total learners shown in table 1 do not include FTEs

9. 9 Worked Example (A3) Allocation/Outturn Table 1: Breakdown of funding for FT/PT bands Planned/timetabled Hours Student Numbers - 2013/14 Allocation 300 100 50 50 50 National Funding Rate Base Student Funding - Allocation 1,200,000 300 400,000 100 135,000 50 106,650 50 50 40,000 1,881,650 Student Numbers - 2013/14 Outturn National Funding Rate Base Student Funding - Outturn 1,200,000 400,000 135,000 106,650 4,000 4,000 2,700 2,133 4,000 4,000 2,700 2,133 Full Time Students (at least 540 hrs) Part Time students (450-539 hrs) Part Time students (360-449 hrs) Part Time students (280-359 hrs) Part Time (up to 279 hrs) Total 1.1 1.2 1.3 1.4 1.5 Students FTEs * 4,000 4,000 40,000 10.00 550 10.00 550 1.6 1.7 1,881,650 * the total learners shown in table 1 do not include FTEs

10. 10 Worked Example (A4) Allocation Table 2: Overall Funding Calculation 2013/14 Allocation Amount 2013/14 Factor Running Total 1,881,650 1,693,485 1,862,834 Funding Rate per student (table 1) 2.1 2.2 2.3 - 188,165 169,349 x Retention x Programme Cost Weighting 0.900 1.100 200,000 2,062,834 + Disadvantage ( /student) - Allocation 2.4 Disadvantage (as percentage of funding allocation) 10.74% 2.4 412,567 2,475,400 x Area Costs 1.200 2.5

11. 11 Worked Example (A5) Allocation/Outturn Table 2: Overall Funding Calculation 2013/14 Allocation Amount 2013/14 Outturn Amount Factor Running Total 1,881,650 1,693,485 1,862,834 Factor Running Total 1,881,650 1,693,485 1,862,834 Funding Rate per student (table 1) 2.1 2.2 2.3 - 188,165 169,349 - 188,165 169,349 x Retention x Programme Cost Weighting 0.900 1.100 0.900 1.100 200,000 2,062,834 + Disadvantage ( /student) - Allocation 2.4 + Disadvantage (as percentage of funding allocation) - Outturn 10.74% 10.74% 200,000 2,062,834 2.4 412,567 2,475,400 412,567 2,475,400 x Area Costs 1.200 1.200 2.5

12. Worked Example (B1) More students, lower bands 12 Table 1: Breakdown of funding for FT/PT bands Planned/timetabled Hours Student Numbers - 2013/14 Allocation 300 100 50 50 50 National Funding Rate Base Student Funding - Allocation 1,200,000 230 400,000 100 135,000 100 106,650 100 100 40,000 1,881,650 Student Numbers - 2013/14 Outturn National Funding Rate Base Student Funding - Outturn 920,000 400,000 270,000 213,300 4,000 4,000 2,700 2,133 4,000 4,000 2,700 2,133 Full Time Students (at least 540 hrs) Part Time students (450-539 hrs) Part Time students (360-449 hrs) Part Time students (280-359 hrs) Part Time (up to 279 hrs) Total 1.1 1.2 1.3 1.4 1.5 Students FTEs * 4,000 4,000 80,000 10.00 550 20.00 630 1.6 1.7 1,883,300 * the total learners shown in table 1 do not include FTEs

13. Worked Example (B2) More students, lower bands 13 Table 2: Overall Funding Calculation 2013/14 Allocation Amount 2013/14 Outturn Amount Factor Running Total 1,881,650 1,693,485 1,862,834 Factor Running Total 1,883,300 1,694,970 1,864,467 Funding Rate per student (table 1) 2.1 2.2 2.3 - 188,165 169,349 - 188,330 169,497 x Retention x Programme Cost Weighting 0.900 1.100 0.900 1.100 200,000 2,062,834 + Disadvantage ( /student) - Allocation 2.4 + Disadvantage (as percentage of funding allocation) - Outturn 10.74% 10.74% 200,175 2,064,642 2.4 412,567 2,475,400 412,928 2,477,571 x Area Costs 1.200 1.200 2.5

14. Worked Example (C1) Less students, higher bands 14 Table 1: Breakdown of funding for FT/PT bands Planned/timetabled Hours Student Numbers - 2013/14 Allocation 300 100 50 50 50 National Funding Rate Base Student Funding - Allocation 1,200,000 320 400,000 123 135,000 20 106,650 20 20 40,000 1,881,650 Student Numbers - 2013/14 Outturn National Funding Rate Base Student Funding - Outturn 1,280,000 492,000 54,000 42,660 4,000 4,000 2,700 2,133 4,000 4,000 2,700 2,133 Full Time Students (at least 540 hrs) Part Time students (450-539 hrs) Part Time students (360-449 hrs) Part Time students (280-359 hrs) Part Time (up to 279 hrs) Total 1.1 1.2 1.3 1.4 1.5 Students FTEs * 4,000 4,000 16,000 10.00 550 4.00 503 1.6 1.7 1,884,660 * the total learners shown in table 1 do not include FTEs

15. Worked Example (C2) Less students, higher bands 15 Table 2: Overall Funding Calculation 2013/14 Allocation Amount 2013/14 Outturn Amount Factor Running Total 1,881,650 1,693,485 1,862,834 Factor Running Total 1,884,660 1,696,194 1,865,813 Funding Rate per student (table 1) 2.1 2.2 2.3 - 188,165 169,349 - 188,466 169,619 x Retention x Programme Cost Weighting 0.900 1.100 0.900 1.100 200,000 2,062,834 + Disadvantage ( /student) - Allocation 2.4 + Disadvantage (as percentage of funding allocation) - Outturn 10.74% 10.74% 200,320 2,066,133 2.4 412,567 2,475,400 413,227 2,479,360 x Area Costs 1.200 1.200 2.5

16. 16 Reconciliation - Transitional Protection (TP) and/or Formula Protection Funding (FPF) Underperformance only Table 1: TP examples No TP TP + ve 3,000 3,000 1.1 Funding Allocation Transitional Protection (TP) or any Formula Protection Funding (FPF) 0 300 1.2 3,000 3,300 1.3 Net Allocation * Funding Allocation (that is being used for under performance reconciliation only) 3,000 3,000 1.4 75 75 1.5 Tolerance - standard 2.5% Funding Claim (figures from ILR FIS Funding Claim report). 1.6 2,400 2,400 - 525 - 525 1.7 Clawback This slide shows how TP or FPF is used in calculating funding reconciliation for underperformance for CCPs only.

17. 17 Reconciliation - Transitional Protection (TP) and/or Formula Protection Funding (FPF) Over performance only Table 1: TP examples No TP TP + ve 3,000 3,000 1.1 Funding Allocation Transitional Protection (TP) or any Formula Protection Funding (FPF) 0 300 1.2 3,000 3,300 1.3 Net Allocation * Funding Allocation (that is being used for over performance reconciliation only) 3,000 3,300 1.4 75 75 1.5 Tolerance - standard 2.5% Funding Claim (figures from ILR FIS Funding Claim report). 1.6 3,400 3,400 325 25 1.7 Responsive growth This slide shows how TP or FPF is used in calculating funding reconciliation for over performance for CCPs only.

18. 18 Adjustments from In-year to Final Claims (CCPs only) Outturn compared to allocation. Shows the alternatives at Final from In-year position FINAL In-year (payment adjustment to take account of in-year clawback) Interim clawback adjustments Under (below tolerance) Within tolerance Over delivery Reversal of in-year clawback and Growth (subject to affordability) No final adjustment other than reversal of in-year clawback Under Clawback Clawback Within tolerance No reconciliation adjustment Growth (subject to affordability) Clawback No final adjustment Clawback No final adjustment other than recovery of interim growth Interim growth (subject to affordability) Growth (subject to affordability) Over delivery Recovery of all interim growth

19. 19 In-year reconciliation example A (all in ) In-year out-turn (ILR figure) Allocation Variance Add in-year tolerance (2.5%) In-year adjustment (clawback) 870 1,000 - 130 + 25 - 105 Funding out-turn (final Claim) Allocation Variance Add final tolerance (2.5%) Final reconciliation value (clawback) 900 1,000 - 100 + 25 - 75 Final reconciliation cash adjustment - 75 (final) deduct Cash final adjustment (re-pay clawback) (in-year clawback) - 105 + 30 * Any clawback calculated from in-year funding figures that is not then calculated from the final claim figures is refunded to CCPs who have increased their delivery above the in-year figure.

20. 20 In-year reconciliation example B (all in ) Allocation February R06 out-turn (ILR figure) 90% of allocation (February) Variance Potential interim in-year adjustment (growth) 1,000 970 900 + 70 + 70 Funding out-turn (final Claim) Allocation Variance Subtract final tolerance (2.5%) Final reconciliation value (growth) 1,200 1,000 + 200 - 25 + 175 Final reconciliation cash adjustment +175 (final) deduct Cash final adjustment (growth) (in-year growth) - 70 + 105 * All growth payments are subject to affordability.

21. EFA Funding guidance for young people 2013 to 2014 CCP Reconciliation 2013/14 EFA Young People s Funding Team