It is said that he is not sad.
This is a complex sentence that is a result of ' He is not sad is said' being cleft into two parts by a well-aimed blow.
'It is said' is the main clause.
What is said? That he is sad. This is the subordinate cluse because it is subordinate in importance to the main clause. Not only is it a subordinate clause but it is also the object of the verb 'said'. Nominal because objects can only be realized by nouns.
It is said... -- we use clefting as a device to give hightened prominence to the postponed NP, which, in our case, expresses what is said.
It is an expletive that fills an obligatory space (subject territory). So it has grammatical function. What it does not have is meaning. It is therefore called an empty subject, grammatical subject, as opposed to the real or deep subject realized by the subordinate clause.
You can drop 'that'.
It is reported that two people were injured in the explosion (is it possible to use have been injured here?) Yes.
A friend of mine has been arrested. It is alleged that he hit a policeman (could I say has hit?) Yes.
It is supposed to be so.
It is supposed that it is so.
It is alleged that it is so.
It is rumoured that it is so.
Rumour has it that it is so.
Broadly speaking, they all mean the same thing.
- For Teachers