CSU San Marcos Budget Training. Understanding the basics of managing a budget

Transcription

1 CSU San Marcos Budget Training Understanding the basics of managing a budget

2 A budget is a plan Budget Basics What is a budget? Budget is not another word for cash Budgeting provides a vehicle for translating goals into financial resource plans for a certain period of time CSU s fiscal year runs July 1 through June 30

3 Campus Budget Allocation Process State of California Governor s January Budget May Revise Final June Budget Higher Education California State University CSU, San Marcos

4 Terminology: Budget Scenarios BASE funds Permanent base allocation Continuing budget allocation to cover expenses that recur annually Includes: Base Budget Most common: BBB Base Budget (allocation) BBT Base Budget Transfer ONE-TIME funds Onetime allocations for special projects or expenses beyond the scope of base budget Expenses that are not recurring Most Common: OBT One-Time Budget (allocation) OBT One-time Budget Transfer

5 Two Parts to Every Budget Revenue (Base and/or One-Time funding) State Appropriation Student tuition and fees Self-generated revenue in auxiliary units or self-supported designated funds such as Extended Learning Budget transfer IN from a different FUND group like Lottery or IRA Grants such as CSUPerb Expenditures Salaries Operating expenses Travel Hospitality Special Consultants Student Assistants

6 CSUSM Annual Budget Cycle 1. Planning Supervisor & Budget Coordinator: Analyze needs, develop goals and objectives (Three Year Rolling Plan Review process) 2. Development Supervisor & Budget Coordinator: Estimate cost, project revenues (Base Budget Review/BBR process) 3. Implementation Budget Coordinator: Create and record budget in a shadow system (we use Excel and have templates available) 5. Control Supervisor & Budget Coordinator: Take corrective action, get support if needed, project funds through end of year (Mid Year Report & Fiscal Year Close) 4. Monitoring Budget Coordinator: Compare budget to actual revenue and expenses through reconciliation process monthly, investigate variances (Complete signed reconciliation report)

7 Budgeting Practices: Fund Groups Most Common: General Funds (State): Fund 485xx Must follow State Guidelines and Regulations Uploaded to your department around September 30 May spend in the negative (485xx only!) from July to September until funds are allocated for necessary items to run the department Must spend to zero or funds will be swept June 30 (Exceptions include CSUPerb Funds and Course Fees which MUST roll to the next year). Must request approval for exceptions from Academic Affairs. Extended Learning Special Sessions: Fund May roll or carry forward over to the next fiscal year if not spent

8 Budgeting Practices: Fund Groups (continued) Other funds include: Lottery Fund 481xx Instructional Related Activities (IRA) Fund University Professional Development (UPD) Fund Senior Experience Fund Projects: Auxiliary Funds through CSUSM Corporation which do not follow the fiscal year cycle EACH FUND HAS ITS OWN GUIDELINES AND REGULATIONS

9 Terminology: Transaction Types Budget Spending Authority Allowance/ Income Encumbrance Funds earmarked through the PO process for specific purchases. Reflects in the balance as expense Actual Actual expense Check has been cut and vendor has been paid Posted Revenue Balance (BBA) Budget less encumbrances and actuals.

10 How do I monitor my department s budget? Create a budget shadow or tool (basically a ledger, much like a check book ledger, that can be created through Excel - templates are available and customizable to your unique needs) Reconcile the shadow system to the General Ledger monthly by using reporting tools in CFS/Data Warehouse Forecast your budget by projecting revenue and expenses through end of the fiscal year Training is available through your lead Budget Analyst

11 Sample Shadow Budget

12 Budget Reconciliation Definition Budget reconciliation is the process of reviewing transactions, supporting documentation, and resolving any discrepancies that are discovered. Process Run CFS/Data Warehouse report by Department, Fund, Account (DFA) Compare data from report to shadow budget ensuring accuracy (including encumbrances), resolve any variances Project expenses and revenue through end of fiscal year and that it will be within budgeted amounts Sign and retain reconciliation report for audit purposes

13 Sample Monthly Budget Report from CFS/Data Warehouse by DFA

14 Sample Shadow Reconciliation PIVOT by DFA

15 Reconciling Why is it Important? Foundation of Internal Control Insures compliance to Regulations Protects the resources of the University by being good stewards Confirms financial statements are accurate and reliable It s an audit requirement

16 Reconciling What Do I Look For? Confirm transactions are posted for the correct amount and match your shadow. This should include the student & hourly payroll (HR Actuals Report). Transactions are recorded in the correct department, fund and account. All transactions that should be recorded are recorded. The balance in the shadow budget matches the balance on the budget report in three columns: Budget, Actuals and BBA (balance) as well as each account.

17 What Should I Do if I Find an Error? RESEARCH and get it corrected as soon as possible For questions regarding the payment of an invoice, contact Accounts Payable For payroll questions, contact Payroll Services For budget help, contact your lead Budget Analyst Corrections may include submitting the following: Salary Adjustment Financial Transfer Budget Transfer

18 Financial Monitoring Who do I report my budget to? Create a budget reconciliation report monthly signed by the Supervisor and Budget Coordinator. This would include your CFS/Data Warehouse report AND your Budget Shadow Pivot Summary showing they reconcile Send a copy to your lead Budget Analyst by the due date (usually the last day of the month after the general ledger closes) Keep the signed original along with documentation in the department in case of an audit

19 Financial Monitoring - Forecasting What is financial forecasting? Projecting what the total revenues and expenses will be at the end of the fiscal year Why is it important? To determine whether or not your funds will end the fiscal year on target and in good financial health

20 Annual Financial Monitoring Mid-Year Projections: Due with your December reconciliation, projecting how funds will be spent through the end of the fiscal year (June 30). Instructions and forms will be provided at Mid-Year Year-End Closing: The Budget Office will provide a Year-End Closing Calendar to monitor deadlines for processes towards end of fiscal year (June 30)

21 Keys to Successful Budget and Projecting: KNOW YOUR EXPENSES: Two Types Fixed Expenses Expenses that are known at the beginning of the fiscal year and can be projected out. Most Salaries Telecommunication charges Annual contracts/subscriptions Routine maintenance Variable Expenses Expenses that vary from year to year. Estimates of unknown expenses can be made based on prior years data. General office supplies and services Service fees such as printing and postage Planned onetime projects Unexpected projects and maintenance

22 Review A Budget is not cash. It is a plan or spending authority granted to a Unit or Department Reconciling your records monthly is the foundation for internal control and insures protection of the University s resources. It is also required for auditing purposes. Auditor s may request to see a signed budget reconciliation for any given department for any given month. It is the responsibility of the Unit/Department to maintain and make available the signed reconciliations Forecast with projections to confirm your budget will be on target and ensure strategic spending rather than last minute spending Budget Analysts are resources for help. Please call or for additional training, questions or for help resolving issues

23 QUESTIONS? Contact: Maria Rasimas Resource & Operations Analyst Planning and Academic Resources CSU San Marcos February 26, 2018