Budgeting and Reporting

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• Budgeting and Reporting

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Budgeting and Reporting Class
Agenda December 14, 2004 Budgeting
Strategies Barbara Morycz Reporting Sue
Jones ADI Tips and Reminders Dan
Giammatteo
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Budget Strategies
Budgets and Forecasts A budget is a formal
expression of the plans for the operation for
a specific period. This agreed upon plan is
then frozen. A forecast is a projection of
activity based upon the latest
information. A budget or forecast is your
best estimate of the departments financial
results for a fiscal year.
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Budget Strategies
Budgets and Forecasts Measure actuals and
forecasts against the budget throughout the
planning process. Analyze anticipated versus
actual results Predict future performance and
anticipate changes Assist in monitoring
control of current performance Provide early
warning of deviations from plans
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Budget Strategies
Budgets and Forecasts Input is required from
many sources. Department management Key
personnel in the department (PIs, systems
support, faculty that control significant
funding from any source including
discretionary funds, etc.) Financial
assumptions from university management
(salary pools, benefits rates, sponsored
projects FA rates, tuition growth, etc.)
Most Important -- Your knowledge of your
organization and business.
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Budget Strategies
Other Issues to Consider When forecasting
financial aid, consider whether the tuition is
paid by the university (financial aid) or paid
by the students from their university wages
(graduate student wages). The first is a
reduction in revenue, the second is an expense.
When forecasting gifts, consider past trends
plus any knowledge that you have on future
prospects.
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Budget Strategies
Other Issues to Consider When forecasting
sponsored projects, consider the following
Status of current contracts in hand. Status
of open proposals. Department trends in win /
loss on proposals. Historical sponsored
projects trends for the department. Current
information on the status of the funding from
your major sponsors. Forecast any required cost
sharing and funding, and include it in the
budget assumptions.
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Budget Strategies
Other Issues to Consider When forecasting
salaries, consider the following Source of
funding for faculty, staff, and students
salaries and benefits need to be budgeted in
the proper funding source. Include new
employees with the best estimate of where
their time will be charged.
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Budget Strategies
Other Issues to Consider When forecasting other
operating costs, consider any extraordinary
spending in the current year that will not be
required in future years, and any new
initiatives that will require funding for the
first time. When forecasting capital
expenditures, consider any extraordinary
spending in the current year that will not be
required in future years, and any new
initiatives that will require funding for the
first time.
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Budget Strategies
Other Issues to Consider Depreciation expense
must be budgeted for all auxiliaries.
Consider items that will be fully depreciated
this year, as well as new capital expenditures
that will need to be depreciated in future
years. Debt service payments need to be
budgeted for all departments with internal
loans. If the department is anticipating a
new loan in future years, this needs to be
included in the assumptions, and debt service
needs to be budgeted in future years
forecasts.
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Budget Strategies
Other Issues to Consider Balance transfers
within your organization i.e. to fund a
deficit in operations, reflect the debit in the
designated operating reserve and the credit in
general operating. Include transfers to fund
capital projects.
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Budget Strategies
Information Needed to Start Your Budget /
Financial Review Financial Reports Operating
Statement Funding Source Detail Financial
Review Reports Allocation Letter Salary
Information Application Desktop Integrator
(ADI) Budget Development Integrator (BDI)
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Budget Strategies
First Steps Depend Upon Your Organization What
is the largest part of your budget? By funding
type? By expense type? Does one portion of
your budget depend upon another portion of the
budget?
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Budget Strategies
Review of Operating Statement and Funding Source
Detail Statement
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General Operating Funding Sources
Represents your departments operating budget
-- university allocation, summer programming,
executive education, INI masters program, Heinz,
GSIA, unrestricted contributions Allocation
Budget Base Allocation - Funding Source 000002 -
Revenue code 71100 One-Time Allocation - Funding
Source 000003 - Revenue code 71200 Base GTR
(Graduate Tuition Rebate) - Funding Source 000006
- Revenue code 71100 One-Time GTR - Funding
Source 000007 - Revenue code 71310 In many
cases, salaries and benefits are the largest part
of the budget.
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General Operating Funding Sources
Allocation Budget continued Can segregate
revenues, expenses, and transfers by activity
codes for analysis purposes. First budget the
monthly expense and transfer portion of the
budget as these will be incurred, ensuring that
the total equals the allocation, then match
allocation revenue monthly to net to
zero. The actual allocation revenue each
month will equal the budget.
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General Operating Funding Sources
General Unrestricted - Funding Source 000001 (GL)
or 000005 (GM) Note Very few organizations on
campus use funding source 000005 Budget
revenues and expenses monthly as they will be
incurred. Budget transfers to / from the
operating reserve as needed. NOTE When
forecasting general operating, you may use only
one funding source. Be sure not to double count
budget and forecast dollars.
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General Institutional Funding Source
Represents general university expenses
-- Insurance, legal expenses, general banking
fees, external audit services, commencement ,
diplomas, etc. Allocation Budget Base
Allocation - Funding Source 000004 - Revenue
code 71100 Budget expenses monthly as they
will be incurred. Budget allocation revenue
monthly to net budget to zero. Other
General Institutional - Funding Source 000004
Budget revenues, expenses, and transfers
monthly as they will be incurred.
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Designated Operating Funding Sources
Operating Reserve - Funding Source 060000 Budget
transfers to / from other funding sources as they
will be incurred. Ensure that transfers
match. Cost Sharing - Funding Source 063000 Any
costs incurred and funded by the university that
can be directly attributable as support to an
existing sponsored project. Expenses are
budgeted in grants by project, task and cost
sharing award. Transfers to fund cost sharing
and expenses are budgeted in summary in the
GL. The university funds Facilities
Administration expense in cost sharing. Either
the department or the university can fund the
direct cost sharing expense per agreement.
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Designated Operating Funding Sources
Other Designated Operating Funding
Sources Faculty Discretionary Funds - Funding
Source 061000 Internally Funded Projects -
Funding Source 062000 Faculty Development
Grants - Funding Source 064000 SURG - Funding
Source 065000 Affiliate Programs - Funding
Sources 066000-069999 Innovation Technology -
Funding Sources 800000-809999 Royalties are
transferred to the departments and
colleges. Do not budget beginning net
assets. These are generated yearly by the
University based on prior year ending net asset
actuals.
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Sponsored Projects Funding Sources
Federal Sponsors - Funding Sources 071000 -
075000 Army, Air Force, Navy, Department of
Energy Non-Federal Sponsors - Funding Sources
081000 - 083020 Industry, State Government,
Affiliate Sponsors Future Funding - Funding
Source 089000
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Sponsored Projects Funding Sources
Sponsored projects are budgeted in detail in the
Grants Management module of Oracle. Award
identifies the type of funding or revenue
source. Project and task define the work to
be done -- budget expenses as they will be
incurred. Salary budgeting and balancing is
important.
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Sponsored Projects Funding Sources
Sponsored projects then need to be summarized and
budgeted in GL by funding source. Revenues,
expenses, and transfers should be budgeted as
they will be incurred. Do not budget beginning
net assets. These are generated yearly by the
University based on prior year ending net asset
actuals. Issues to be considered Use of Budget
Management Spreadsheet (BMS) for actuals,
budgets, GL funding sources, etc. Timing of
revenue recognition (revenue, transfers) Recognit
ion of cost sharing Budgeting / forecasting in
future funding
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Auxiliary Funding Source
Auxiliary - Funding Source 050000 Auxiliaries
include Dining, Housing, Parking, Printing,
Retail, Telecom Identified as a unique entity
in Oracle to allow it to be analyzed as a
stand-alone business -- operating statement,
balance sheet, cash flow. Auxiliaries are
expected to cover all of their costs, so
university overhead is charged to each
auxiliary. Revenues are based on business
generated by the auxiliary. Expenses will often
be directly related to revenues. Many
auxiliaries carry inventories.
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Auxiliary Funding Source
Budget revenues, expenses, and transfers monthly
as they will be incurred. Do not budget
beginning net assets. These are generated yearly
by the University based on prior year ending net
asset actuals. Capital is charged to the balance
sheet, not the operating budget For internal
loans, interest is expensed principal payments
are charged to the balance sheet. Any surplus
or deficit falls to the bottom line (net assets)
and is carried forward to the next fiscal
year. Business is evaluated on cash
flow.
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Recharge Center Funding Source
Recharge Centers - Funding Source 055000 Charge
services to other parts of the campus. Budget
revenues, expenses, and transfers monthly as they
will be incurred. Do not budget beginning net
assets. These are generated yearly by the
University based on prior year ending net asset
actuals. Any surplus or deficit falls to the
bottom line (net assets) and is carried forward
to the next fiscal year (Note surpluses cannot
be used by other parts of the department or
university). The recharge center is expected
to build prior year balances into future
pricing.
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Unrestricted Endowment Funding Sources
Unrestricted Endowment - Funding Sources 000100 -
049999 The endowment is much like a mutual fund.
The gift buys shares in the endowment, and a
yearly distribution of income is made based on
shares. Budget endowment revenue in August and
January budget expenses as they will be
incurred. Do not budget beginning net assets.
These are generated yearly by the University
based on prior year ending net asset
actuals. Balances carry forward into the next
fiscal year.
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Temporarily Restricted Funding Sources
Temporarily Restricted Endowment - Funding
Sources 100000 - 199999 Temporarily Restricted
Contributions - Funding Sources 200000 -
299999 Revenue must be spent per donor
specifications. Budget endowment revenue in
August and January budget gift revenue as it
will be realized budget expenses as they will be
incurred do not budget transfers. Do not
budget beginning net assets. These are generated
yearly by the University based on prior year
ending net asset actuals. Balances carry
forward into the next fiscal year
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Capital Reserve Funding Source
Capital Reserves - Funding Source 090100 Budget
transfers to / from other funding sources as they
will be incurred. Ensure that transfers
match. Do not budget beginning net assets.
These are generated yearly by the University
based on prior year ending net asset actuals.
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Agency Funding Sources
Agencies - Funding Sources 900000 - 910000 Not
included on the operating statement. Represents
a group outside of the university that uses the
universitys services and then either repays the
university or is funded by the university. Unique
object code for university funding -- 85802 -
Agency Funding Examples include student
organizations, clubs, etc. May have university
phone service, copy service, etc.
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Agency Funding Sources
Agencies - Funding Sources 900000 - 910000 Not
included on the operating statement. Represents
a group outside of the university that uses the
universitys services and then either repays the
university or is funded by the university. Unique
object code for university funding -- 85802 -
Agency Funding Examples include student
organizations, clubs, etc. May have university
phone service, copy service, etc.
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Budget Strategies
Funding Source Mapping Operating Statement to
Financial Review Financial Review General
Operating General Operating General
Institutional Financial Review Sponsored
Projects Sponsored Projects Financial Review
Auxiliary / Recharge Auxiliary Recharge Finan
cial Review Designated Designated Unrestrict
ed Endowment Capital Reserve Financial Review
Temporarily Restricted Temporarily Restricted
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Budget Strategies
Verify your budgets and forecasts in
Oracle. Run Financial Review Reports report
set. Review yearly historical trends vs. future
yearly growth.