Installing and Adjusting the Budget

Transcription

1 Budget Installing and Adjusting the Budget Author(s): The ICT Service Helpline Reviewed by: Emma Ward Publication date: May 2014 Version: 1.0 Review date: website: Helpline: Page 1 of 35

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3 Contents Introduction... 4 Checking the Settings... 5 Installing the Budget... 6 Print off the Budget Plan... 6 Checking the Budget Locating missing codes Identify which amount is wrong Checking Printout Fixing the Budget Maintaining the Budget Increasing Budgets Increasing the Funding Allocation Increasing the spending Allocation Decreasing Budgets Decreasing the Funding Allocation Decreasing the spending Allocation Moving Budget Reducing the Allocation of the source Cost Centre Increasing the Allocation of the destination Cost Centre The Audit Trail Page 3 of 35

4 Introduction Throughout the year there will be times when the Budget will require adjusting. Most of these events will stem from changes on the Funding Statement. Either new Funding will be allocated and need to be added into the system or Funding will be withdrawn or revised such as the estimated Carry Forward for a first year school or the TA hours allocation. In a Bank Account system the Budget is always completely balanced. The allocations to spending Cost Centres (including Income) are always balanced by amounts allocated to the Funding Cost Centre. The entire budget is managed via a single route Cost Centre Allocations. All movements create an audit entry so movements of the budget can be checked and tracked. Page 4 of 35

5 Checking the Settings Use Tools User Options There should be a tick in the Auto adjust limits box. If it isn t there click on the box to enter the tick and click Save. If the tick is present just click on Save This facility will make budget entry easier. Page 5 of 35

6 Installing the Budget Installing the Budget only happens once a year so it is very easy to forget the complexity of the process. In effect it is the same process as would be used to add new funding during the year although far more actions are involved. It is vitally important that time is set aside for this process. Never assume that the budget will slip easily into place. However, many errors can be avoided by good preparation. Try to set aside at least a couple of hours for the process. Ideally you should be able to concentrate without interruptions for this entire period. You will also need sufficient space to lay out your budget plan with any extra annotations for Curriculum expenses etc. There should also be space to lay out the FMS6 reports to carry out a tick and check should things go wrong. Two heads are definitely better than one on this process. Two people can keep track of what has and what hasn t been done as well as assisting with the ad hoc decisions that inevitably arise. Ideally at least one of these people should have been involved in the construction of the Budget Plan. Print off the Budget Plan Look it over for complexities like multiple Cost Centres for Curriculum or Visits etc. The printout often has multiple columns for a variety of years. Hide the unnecessary columns to avoid confusion. The easiest way is to fold the sheet so that the current year budget is placed close to the Ledger Codes. Open FMS6 and make sure you are in the correct year. Use Reports General Ledger Setup Chart of Accounts Listing to provide a listing of your Cost Centres and the Ledger Codes attached to them if you would like to have hard copy to hand. Alternatively you can locate where a Ledger Code is linked by referring to Tools General Ledger Setup and selecting Card 6 Page 6 of 35

7 Use Focus Budget Management Cost Centre Allocation The Cost Centre Allocation screen appears. Note the amount showing in Fund Allocation. This only appears after Preliminary Close and is the total calculated value of the Carry Forward from last year. This may change during the close down process until the Final Close locks it into place. This amount should be allocated to the CFWD and or DFCT codes as shown below.. Page 7 of 35

8 This screen shows a List of the Cost Centres in your system but the Budget has to be allocated to the Ledger Codes WITHIN the Cost Centres. The Chart of Account printout will assist in locating where a Ledger Code is linked. In FMS6 the item will be allocated according to the type of Ledger Code. Income Ledger Codes (such as Funding) will automatically be given Income budgets and CANNOT be allocated a debit amount. Equally Salary and Expenditure Codes can only be allocated Expenditure amounts. Where the Plan requires a debit to be lodged against an Income code or a credit against an Expenditure you will have to talk to County Finance to obtain a new version of the Ledger Code in FMS6 to accommodate this. That is why there is a CFWD (Income) and DFCT (Expenditure) Ledger Code to deal with Carry Forwards. Another problem can arise where a Plan is allocated to pence and FMS6 will only budget to the pound some rounding may have to be done to complete the allocation in FMS6. Page 8 of 35

9 Allocating the Budget. Because the process is so complex it is important to minimise error by establishing a working process. Work down the Budget Plan and tick off each item as it is entered into FMS6. The easiest place to start is with the Funding but there is no right way to do it so proceed in the order you wish In this instance there is nothing has been allocated to FUND-01. Double click on the Ledger code line or highlight and click on the pencil to open it for editing You can enter a narrative but it is not necessary When the amount is allocated it is profiled according to the model unless that is set to Manual in which case you will have to allocate the amount across the periods in the right hand screen Page 9 of 35

10 The Grid icon Once you have completed the allocation for this Cost Centre check that the amount in the Total Allocated boxes agrees with that in the Limit boxes at the top. If not edit the limit to agree. Click on the grid icon to return to the Cost Centre screen and enter an Audit entry. Continue in this way until all the Codes and Cost Centres on the plan have been ticked off. Where a Ledger Code cannot be located highlight both the code and the amount on the Budget Plan to indicate there is a problem and move to the next item. Look carefully at the items on the Plan, particularly those preceded by a minus (Income). As mentioned above FMS6 follows certain conventions with the budget and Code type that may differ from what the Plan requires. Annotate the Plan with any decisions you have to make such as allocating the amount in FMS6 to some other code that is similar to that on the Plan but not quite the same. Page 10 of 35

11 When you reach the end of the Plan the amount in the Net Allocated box should be 0 to indicate a Balanced Budget. Page 11 of 35

12 Checking the Budget. When installing the budget does not produce a zero there are several steps and checks that can be carried out. Did you skip any Ledger Codes because you could not find them? Locating missing codes Use Tools General Ledger Setup and select Card 5 Try to locate the Ledger Code in the List. If you cannot find it you need to add the Ledger Code by clicking on the plus Make sure you identify what code type to use (Income, Expenditure or Salary); what Ledger Group it is to be linked to and what Fund, what profile to use and what the default VAT rate should be. Once created the Ledger Code must be linked to a Cost Centre. If you can locate it then maybe it is not connected to the correct fund. Locate and open the Ledger Code and look at the fund window at the bottom of the screen. If the fund is missing click on the spyglass at the right hand side of the box and move the fund from the left to the right hand windows and Save then Save again. Once created the Ledger Code must be linked to a Cost Centre OR maybe it is not connected to a Cost Centre Use Tools General Ledger Setup and select Card 6 Locate the Ledger Code If it appears in the list then the two right hand columns provide details of the Cost Centre(s) to which it is attached. Make a note of them on the Plan and then return to the Budget Allocation screen to enter the missing element. NOTE make sure it has the correct fund flag on the end. Allocating the budget for to is not a good solution If the Ledger Code (with fund flag) does not show then it needs to be linked Click on the Plus to create a new link From the top left hand box locate the Cost Centre and move it to the right. From the lower left hand box locate the Ledger Code with the correct fund flag and move it to the right. (If you click into the window listing the codes the cursor goes a brighter yellow which activates the hunter allowing you to type the first couple of digits of the code to move swiftly over the list.) Click on Create Links to link the selected items Click Save to complete the process You can now go back to Budget Allocations to fill in the missing amount Page 12 of 35

13 Identify which amount is wrong Is the amount in Expense Allocated larger that Income Allocated or r vice versa? If Expense Allocated exceeds Income Allocated then you have allocated more budget to Expenditure than you had income for. Check the budget allocated to Contributions to Carry Forward as this may have been missed off. If Income Allocated exceeds Expenditure Allocated then you have allocated more Funding than you have allocated to Expenditure. Check the budget allocated to Contributions to Reserves or Contingency as these may have been missed off. Checking Printout Print off the Annual Budget Listing Focus Reports Budget Management Annual Budget Listing By Ledger Code Summary. This will list only the codes that have been allocated a budget. Now EITHER run down the plan and tick off the amounts on the Annual Budget Listing OR run down the items on the Annual Budget Listing and tick them off on the Plan. Do not change part way through as that way lies a muddle. Always start with the Income since there are fewer codes to check and thus the solution may come quicker. Eventually you should be left with some items unticked. And these should relate to the missing amount. DO NOT try looking for the precise amount that is missing. Sometimes it can be as easy as that but often it is the sum of several items. Sometimes it is half the value shown when the amount on the plan was a credit and it was entered into FMS6 as a debit or vice versa. Is the difference divisible by 9? It may indicate a transposition of numbers say 119 entered instead of 191. Page 13 of 35

14 Fixing the Budget Once the approved balanced budget has been installed make sure you fix the budget. This does not stop you adjusting it at later stages but it does lock down a starting place which is stored as the Original Budget. The Current Budget will always reflect your changes through the year but it can be compared back to the Original for Governors and Managers to see how the planned budget had to be adjusted for operational reality. The clearest presentation of this is in the Annual Budget Listing (see previous page) where both budgets appear side by side with a Variance column highlighting the movement. This can only be done once and the icon is at the top right of the screen directly beneath the Question mark Page 14 of 35

15 Maintaining the Budget Increasing Budgets Upon Receipt of the Funding Statement the user should raise and Post a Cash Book journal in the normal manner. New Funding will normally appear as additional lines below the usual lines. There should also have been some mention of the additional money in the Finance Newsletter. The Cash Book journal sets the amount(s) into the ACTUAL column on the BCR. In order to correct the entries in the BUDGET column the user will have to increase the Budget in at least TWO places. Increasing the Funding Allocation Use Focus Budget Management t Cost Centre Allocation The Cost Centre Allocation screen appears. Cost Centres At the start of any modifications the Net Allocated should show zero but if not make a note of the value showing. Your adjustments should either set things to zero or return to that value. Page 15 of 35

16 Double click on the FUNDING Cost Centre A screen of all the Ledger Codes linked to the Cost Centre appears Edit pencil Highlight the ledger code that needs adjusting and click on the edit pencil or double click on the Ledger Code The following screen will appear Overwrite the amount with the replacement value (previous plus new) There is no need to enter anything in the narrative box as this is NOT the Audit Trail. What is entered in the narrative remains there as a sort of aide memoire. Click on Save. Page 16 of 35

17 Click on Yes at the following prompt if it appears NOTE This will only appear if there is no tick in the Autoincrease box see setting up notes The screen returns to the Ledger Code list If the budget is increased these should show the same value as the Allocated boxes These should show zero Save the details by clicking on the Floppy disc icon at the top of the page. This will cause the Audit Trail window to open. Enter a relevant narrative Click on Save Click on the grid to return to previous screen Page 17 of 35

18 The extra income allocated will appear as shown Extra Income For the budget to balance back to zero this extra income now needs to be allocated to at least one spending Cost Centre. If unsure or undecided allocate it temporarily to the Unallocated Ledger Code in the Admin Cost Centre. Page 18 of 35

19 Increasing the spending Allocation Staying in Cost Centre Allocations Double click on a spending Cost Centre line From the list of linked Ledger Codes locate and select the required line by either double clicking on it or highlighting it and clicking on the edit button Page 19 of 35

20 Highlight the existing value and replace with the increased value then click Save The expense and Income should be zero If not amend the Limit amounts to agree with the Allocations Page 20 of 35

21 Save the details by clicking on the Floppy disc icon at the top of the page. This will cause the Audit Trail window to open. Enter a relevant narrative. If it is similar to the Funding entry it will help link the transactions on the Audit Trail Click on Save Click on the grid to return to previous screen If the increase is to be shared by more than one Cost Centre then locate the next Cost Centre and repeat step two until all the increase has been allocated. At that time the bottom of the Cost Centre Listing screen will look like this: If all the above has been completed correctly the Net Limit and Net Allocated should be zero Page 21 of 35

22 Decreasing Budgets The Funding Statement is more likely to contain additions to Funding than decreases but it can happen that money is clawed back or budgets are revised. These will be harder to spot as they will often occur on existing lines of the Funding Statement but as before there should have been some mention of the changes in the Finance newsletter. As with increasing the Budget this process will involve at least TWO steps Decreasing the Funding Allocation Focus Budget Management Cost Centre Allocation The Cost Centre screen appears showing all the allocations. At the start of any adjustment exercise the Net Allocated amounts should show a zero Double click on the relevant Cost Centre line Page 22 of 35

23 The screen showing all ledger codes linked to the cost centre will appear. Edit pencil Highlight the Funding ledger code to be decreased and click on the edit pencil or double click on the Ledger Code The following screen will appear Highlight the existing figure and replace it with Click on Save Page 23 of 35

24 The following screen will appear FMS6 does not adjust limits down when a decrease is posted. The amount of the decrease will appear in the unallocated box Amend the amount in the Limit box to agree with that in the Allocated box. Save the details by clicking on the Floppy disc icon at the top of the page. This will cause the Audit Trail window to open. Enter a relevant narrative Click on Save Click on the grid to return to previous screen Page 24 of 35

25 The Cost Centre list screen now shows the value of the decrease in the Net boxes Reduced expenditure For the budget to balance back to zero the reduced expenditure now needs to be allocated to at least one spending Cost Centre. If unsure or undecided allocate it temporarily to the Unallocated Ledger Code in the Admin Cost Centre. Page 25 of 35

26 Decreasing the spending Allocation Staying in Cost Centre Allocations Locate the spending Cost Centre and Double Click on it The screen showing all ledger codes linked to the cost centre will appear. Highlight ledger code that needs adjusting and click on the edit pencil OR Double click on it Page 26 of 35

27 Highlight the Amount and overtype it with the replacement value (previous less adjustment) NOTE The profiled amount will not adjust unless the user presses TAB out of the amount box or clicks on Save Click on Save to return to the Ledger Code Listing The limit will need to be manually adjusted to the same value as the Allocated figure Save the details by clicking on the Floppy disc icon at the top of the page. This will cause the Audit Trail window to open. Page 27 of 35

28 Enter a relevant narrative Click on Save Click on the grid to return to previous screen If the reductions are to be shared by several Cost Centres locate the next Cost Centre and repeat step 2 until all budgets have been reduced If all the above has been completed correctly the Net Limit and Net Allocated should be zero Page 28 of 35

29 Moving Budget In many cases new Funding will be allocated temporarily to the Unallocated Code whilst decisions are made about how to use it. Once that decision is reached budget will need to be moved from the Unallocated Code to the preferred place. Again the process involves at least TWO steps Reducing the Allocation of the source Cost Centre Focus Budget Management Cost Centre Allocation The Cost Centre screen appears showing all the allocations. Double click on the source Cost Centre Page 29 of 35

30 The Ledger Code screen appears. Highlight the source Ledger Code and click on the edit button or double click on it. highlight the amount and overwrite it with the reduced value then click Save Adjust the limit amount to the same as the Allocated amount. Page 30 of 35

31 Save the details by clicking on the Floppy disc icon at the top of the page. This will cause the Audit Trail window to open. Enter an Audit entry Click on Save Click on the grid to return to previous screen Page 31 of 35

32 Increasing the Allocation of the destination Cost Centre Staying in the Cost Centre Allocation screen locate the destination Cost Centre and double click on it. The Ledger Code screen appears. Highlight the source Ledger Code and click on the edit button or double click on it. Overtype the existing amount with the new value and click Save Save the details by clicking on the Floppy disc icon at the top of the page. This will cause the Audit Trail window to open. Fill in the Audit entry that appears and click Save Page 32 of 35

33 The Net Allocated is showing a zero so the process has been successfully completed. The net limit is showing an amount which indicates that at some point the limits were not edited. To correct this go back into the Cost Centres involved in the edit and check and, where necessary, correct the limits. Page 33 of 35

34 The Audit Trail There is only one report to verify what has been done to modify the budget The Audit Trail. Practically every operation in FMS6 is monitored and logged with date, time and operator. Use Reports General Ledger Audit Audit Trail The full audit trail is extremely large! It pays to restrict it by selecting a type and subtype. The ones above are the selection for Budget amendments and new structure. Unless you are vey sure leave the dates blank to allow all dates to be reported. NOTE the report internally restricted by Financial Year. Page 34 of 35

35 The Audit Report is very complex and requires a degree of study. The circled section indicates the amounts involved in the form starting amount/closing amount. The highlighted entry on the line is the narrative supplied by the user as an audit entry. Ideally these should be in pairs or groups to link together related changes Page 35 of 35