Commitments AN INTRODUCTION TO PURCHASE RESERVATIONS, ENCUMBRANCES, AND BUDGET RESERVATIONS

Transcription

1 Commitments AN INTRODUCTION TO PURCHASE RESERVATIONS, ENCUMBRANCES, AND BUDGET RESERVATIONS University Planning and Budgeting September 24, 2009

2 Banner Commitments In Banner, a commitment refers to the sum of Purchase Reservations Encumbrances Budget Reservations Western currently uses purchase reservations and encumbrances. Under the new budget process, Western will begin using budget reservations this fiscal year. Departments can commit either permanent budget or temporary funds.

3 Banner Purchase Reservations A purchase reservation is a non-legal estimate for anticipated but not yet encumbered expenditures. Purchase reservations can set aside either permanent budget or temporary funds. Purchase reservation transactions are triggered by a purchase requisition and are followed by a purchase order or contract. Establishing a purchase reservation ensures that funds are available to cover anticipated legal obligations.

4 Banner Encumbrances An encumbrance is a legal obligation for goods, materials, and/or services ordered d but not yet received. An encumbrance can set aside either permanent budget or temporary funds. Encumbrance transactions are triggered by Purchase Orders Contracts Establishing an encumbrance ensures that either permanent budget or temporary funds are set aside for payment when the goods, materials or services are received.

5 Banner Budget Reservations Budget reservations set aside temporary funds for anticipated non- legal obligations approved by the President during the Annual Operating Budget process. A budget reservation applies only to temporary fund balances. Approved budget reservations triggered by a budget reservation request form. Budget reservations may be followed by a purchase requisition, purchase order or a contract. Establishing a budget reservation ensures that temporary fund balances are set aside for future commitments.

6 Establishing A Budget Reservation Divisional budget officers submit a Budget Reservation Request form to University Planning and Budgeting (UPB) for approved fund balance commitments. UPB enters the approved budget reservation in Banner and a unique budget reservation number is assigned. Reservations are held at the division level and division Reservations are held at the division level and division budget officers will work with departments to match expenditures with reservations.

7 Liquidating A Budget Reservation Primary Method: Departments reference the appropriate budget reservation number on a purchase requisition or purchase order. Purchasing to liquidates the budget reservation and creates a purchase reservation or encumbrance in it s place. Other Methods: Other purchasing methods (Pcard purchases, position action forms, internal service charges from facilities, ATUS, printing, etc.) will require division budget officers to approve a Budget Liquidation Form. The Budget Liquidation Form is submitted to UPB for action. Departments and division budget officers will work closely together to ensure that approved budget reservations are properly monitored and liquidated on a timely basis.

8 Process Flow For Reservations/Encumbrances BUDGET RESERVATION President approves budget reservations during the annual operating budget process. Divisional budget officers submit a Budget Reservation Form to University Planning and Budgeting (UPB) for approved fund balance commitments. UPB creates a budget reservation in Banner and a unique budget reservation number is assigned. PURCHASE RESERVATION Department submits a purchase requisition to Purchasing Purchasing creates a purchase reservation in Banner ENCUMBRANCE Department submits a purchase order form or contract to Purchasing Purchasing P h i creates an encumbrance in Banner

9 Process Flow For Liquidations BUDGET RESERVATION Departments submit a purchase requisition, purchase order or contract to Purchasing and reference the unique budget reservation number. Purchasing will liquidate the budget reservation and establish either a purchase reservation or an encumbrance. PURCHASE RESERVATION Department submit s a purchase order form or contract to Purchasing. Purchasing liquidates the purchase reservation and establishes an encumbrance. ENCUMBRANCE Departments acknowledge receipt of goods and/or services and notifies Purchasing. Purchasing liquidates the encumbrance in Banner.

10 Banner Reservation/Encumbrance/Commitment Forms FGIENCB Detailed Encumbrance Activity provides detail at the document number level and reflects encumbrances and reservations in the name column. FGIOENC Organizational Encumbrance List reflects encumbrances and reservations in the name column. FGIBDST Organization Budget Status reflects both encumbrances and reservations under the Commitments column. FGITRND Detail Transaction Activity reflects encumbrances under the ENC column and reservations under the RSV column. When using Web4U, the user is asked to select the columns they want to see. For example: When selecting Encumbrance, the resulting Web4U query will reflect Purchase Orders and general encumbrances. When selecting Reservations, the resulting Web4U query will reflect budget reservations. When selecting Commitments, the resulting Web4U query will reflect both Encumbrances and Reservations.

11 Banner Reservation/Encumbrance/Commitment Reports FBBS02 Budget Status reflects the sum of the balance for encumbrances and reservations in the Open p Commitments column. FBEN02 Commitment Register - reflects the balance of encumbrances and reservations in the Current Commitment column with the documents numbers appearing under the REQ column. FQEN01 Open Encumbrances and Budget Reservations reflects the balance of each encumbrance under the Outstanding Encumbrance, with the document number appearing in the Encumbr Number column; and reflects the balance of each reservation under the Outstanding Reservation column, with the document number appearing in the Reserve Number column. FQBS01 Organizational Budget Status reflects the sum of the balance of encumbrances and reservations in the Open Encumbrance/Reservations column. FQBS03 Summary Organization Budget Status reflects the sum of the balance of encumbrances ces and reservations s in the Commitments column.

12 Banner Reservation/Encumbrance/Commitment Reports FQTD01 Transaction Detail reflects the transaction amount of encumbrances and reservations individually under the Current Month Enc/Res Activity column, with document numbers appearing under the Document Number and Document Ref Num columns. WOPACCT Cumulative Activity reflects the transaction amount of encumbrances and reservations individually under the Encumbrance/Reservation Activity column, with document numbers appearing under the Document Number and Document Ref Num columns. FQBG01 Program Budget Variance Summary reflects the sum of Encumbrance Balances under the Encumbrance column at the fund type Level. FQBG03 Organizational Budget Variance reflects the sum of encumbrance balances under the Encumbrance column and the sum of reservation balances under the Reservation column at the fund type level. FWRCBPG Combined Fund Types Program Budget Status Summary reflects the sum of encumbrances only under the Open Encumbrance column.

13 Appendix Screen shots from Banner forms FGIENCB FGIOENC FGIBDST FGITRND Web4U First page of Banner reports FBEN02 FQEN01 FQBS01 FQBS03 FQTD01 WOPACCT