Office of Budget and Planning. edocs: Transfer of Funds and Budget Adjustments How They Impact the Budget Process

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1 Office of Budget and Planning edocs: Transfer of Funds and Budget Adjustments How They Impact the Budget Process

2 Introduction The goal of this class is to teach people the role Transfer of Funds and Budget Adjustment edocs play in the budget process. edocs: Transactional edocs is another course that will be offered by the Office of Budget and Planning and Accounting which will go into more details on these edocs as well as Internal Billings, Distribution of Income and Expenses, Salary Expense Transfers, General Error Corrections, and Intra-Account Adjustments. For new employees it is recommended that you take KFS Introduction to KFS which is offered by Finance Systems. 2

3 Training Agenda Terminology Changes from FY16 to FY17 A closer look at: Transfer of Funds (TF) Budget Adjustment (BA) Single Sided Budget Adjustment (SSBA) 3

4 Terminology University Supported Permanent Funds Budget loaded into your account on July 1 st in Object Code 4100 and Permanent Funding Combination of University Supported Permanent Funds and Permanent Transfers In and Out of accounts. Actual Permanent Transfers Transfers that will impact your current fiscal year available balances as well as your University Supported Permanent Funds for the following fiscal year. Actual One-Time Transfers Transfer that will impact your current fiscal year available balances but will not impact your University Supported Permanent Funds for the following fiscal year. 4

5 Changes from FY16 to FY17 In FY16, 2-Ledger permanent funding was contained in the base budgets of the expense object codes and could be adjusted by doing Budget Adjustments. In FY17, 2-Ledger University Supported Permanent Funds was loaded into a new revenue object code 4100 at the beginning of the fiscal year. Permanent funding is changed by doing Permanent Transfers in and out of your accounts. Available Funds in 2-Ledger accounts is a combination of your University Supported Permanent Funds and Actual Transfer In s minus Actual Expenses and Actual Transfer Out s. 5

6 Changes From FY16 to FY17 Example of a 2-Ledger Account Posted Current Budget Posted Actual University Supported Perm Budget FY Permanent Budget (BO use only) 500, ,000 Transfer In Ledger Perm Trans In (Outside Unit) 200, ,000 Total Income 700, ,000 Personal Services Regular Payroll Classified 300, ,000 Fringe Benefits Fringe Benefits - Classified (5110) 283, ,750 General Expense Postage 1, Transfer Out Ledger Perm Trans Out (Outside Unit) 115,000 50,000 Total Expense 700, ,600 Available Funds FY Perm Budget ,000 Actual Transfers In 100,000 Actual Expenses (292,600) Actual Transfers Out (50,000) Available Funds 257,400 6

7 Changes From FY16 to FY17 There are new transfer object codes for both 2-Ledger and Non 2-Ledger accounts. A BA can now be initiated by checking a box on the TF edoc. The transfer object codes on both sides of the transaction will be increased and the document will require the budget expense object code to be added on the TO side of every line in the document. Single Sided Budget Adjustments can now be done on 2-Ledger accounts. These changes will be discussed in more detail as we take a look at some of the specific edocs and how they have been impacted. 7

8 edocs Covered In This Course Transfer of Funds (TF) Budget Adjustment (BA) Single Sided Budget Adjustment (SSBA) 8

9 Transfer of Funds (TF) Movement of funds between accounts is now done via a TF for 2-Ledger accounts. In the past transfers of funds in the (2-Ledger) Sub Fund was done via a BA. Transfers of funds should be between accounts that have the same Fund Source. Must use transfer object codes (3xxx). Expense/Revenue object codes cannot be used. Both sides of the transaction To/From must net to zero. 9

10 Transfer of Funds (TF) Object Codes New Transfer Object Codes (As of FY17): 2-Ledger - Permanent Transfer In Transfer Out Within the Same School/College/Unit Outside the School/College/Unit Ledger - One-Time Within the Same School/College/Unit Outside the School/College/Unit Non 2-Ledger Accounts Transfer In Transfer Out Within the Same School/College/Unit Outside the School/College/Unit

11 Transfer of Funds (TF) 2-Ledger Permanent Versus One-Time There are four sets of transfer object codes for 2-Ledger accounts that are used depending on what you are trying to accomplish. It is important to use the correct set of object codes as these have an impact on future permanent funds. Actual Permanent Transfers will change the permanent funding in the next fiscal year s Budget Construction cycle in object code Actual One Time Transfers affect the current fiscal year only and will not change the permanent funding in the next fiscal years Budget Construction cycle in object code Transfer Budgets will not carry forward to the next year s budget cycle. Transfer budget object codes will start at zero in the following years budget cycle. 11

12 Transfer of Funds (TF) Flow Chart 12

13 Transfer of Funds (TF) Process When doing a TF you should ask yourself: Was the transfer already included in the budget? 13

14 Transfer of Funds (TF) Process When doing a TF you should ask yourself: Was the transfer already included in the budget? 14

15 Transfer of Funds (TF) Process When doing a TF you should ask yourself: Was the transfer already included in the budget? 15

16 Budget Adjustment (BA) Reallocate budget during the fiscal year. Move budgets between accounts and/or object codes to more accurately reflect the forecast when the To/From side of the transaction nets to zero. 16

17 Transfer of Funds/Budget Adjustments Things to Consider Adjusting both the transfer and expenditure object code budgets in conjunction with the TF is strongly recommended if not previously budgeted. The adjusted budgets become the updated forecast and will make the inquiry screens and reports easier to understand and more useful. Permanent Transfers as well as Base Budget Adjustments must be completed by the end of January of each Fiscal Year in order to prepare for the following years Budget Construction. Communication will be sent a few weeks before the cutoff will occur. Deficits in 2-Ledger accounts are now determined by comparing the actual revenue to expenses including actual transfers in and out (or the cash balance). 17

18 Single Sided Budget Adjustment (SSBA) Increase or decrease budgets to more accurately reflect your forecast throughout the fiscal year. Make changes to your budget that differ from what was submitted in budget construction. Only one section of the accounting line To / From needs to be completed. BA must be balanced on the To / From sections of the edoc while an SSBA can have different amounts. 18