Effective Date: 12/1/2012

Transcription

1 Department: Finance and Administration Effective Date: 12/1/2012 Standard Operating Procedure: Guidelines for Budget Monitoring Process Summary: The budget is grounded the Observatory strategic plan, which is the foundation upon which our organizational goals and strategies are built. This budget process begins with planning assumptions and ends with budget information entered into the Columbia University budget tool. Budgets are monitored on an ongoing basis and adjusted quarterly if necessary. The Budget Monitoring Process ensures that budgets throughout the organization are executed according to plan, and serves as a system to inform PIs, DAs, and Observatory leaders of significant variances or changes, should they occur. Definitions Budget Tool COB Controller CU DA EI FY ICR PI Proxy account OMB Sponsored Projects YTD Columbia University Budgeting System Consolidated Operating Budget Columbia University Controller s Office Columbia University Division Administrator Earth Institute Fiscal Year Indirect Cost Recovery Lamont-Doherty Earth Observatory Principal Investigator Accounts in the Budget Tool used for certain sponsored projects budgets Columbia University Office of Management and Budget Grants funded by government or private agencies or organizations Year to Date Guidelines: Finance Department staff monitors budget to actual account activity on a routine basis. In addition, PIs and DAs are required by Columbia University policy to monitor each sponsored project statement to ensure the expenditures charged are appropriate and in alignment with the budget. On a quarterly basis, Finance and Division staffs analyze fiscal year to date financial results and determine where budget adjustments are required to the Observatory FY budget. Significant changes in either sources or uses are entered into the Budget Tool and become part of the University-wide Trustee budget in the form of a current estimate. Last Revised: 10/16/2012 Page 1

2 Quarterly Budget Monitoring and Adjustments: Budget to actual variance analysis is conducted by Finance staff, Division Adminstrators and Central Administration Managers Account budgets are adjusted when there is a 10% or greater change in the estimate or when activity is predicted on an account that was previously unbudgeted Finance staff send the Directorate monthly budget to actual statements Monitoring Quarterly Variances: All Account Activity Finance staff download Consolidated Operating Budget reports from the data warehouse at my.columbia.edu Finance staff analyze variances for sources and uses by COB Line Finance staff compare current YTD Activity vs. YTD of prior year for the same period Finance staff analyze the financial results for each Division and send a report to the Division Administrators (sample below) Finance staff analyzes significant variances, generally 10% or $50,000, whichever is higher. Finance staff submit variance explanations to the Earth Institute, OMB and Controller Sponsored Projects Division Administrators compare the current estimate budgets submitted to Finance on the standard budget template to YTD actual financial activity. This is accomplished via an award-by-award review in consultation with PIs. Division requests to adjust the current estimate budget are submitted to Finance using the standard budget templates, with the detailed changes highlighted. If significant changes to the current estimate are anticipated the DA schedules a meeting with the Financial Analyst to discuss. Division administrators estimate and project financials to year-end on a quarterly basis Central Administration Departments Central Administration Managers compare account-by-account current estimate budgets to YTD actual financial activity Variance explanations are submitted to Finance staff Requests to adjust the current estimate budget are submitted Finance using the standard budget templates If significant changes to the current estimate are anticipated the Manager schedules a meeting with the Financial Manager to discuss. Central Administration Managers estimate and project financials to year-end Indirect Cost Recovery (ICR) Finance staff review ICR projections on a quarterly basis, with input from the Divisions Finance staff review ICR expense on a quarterly basis, with input from the Central Administration Managers If a significant budget to actual variance exists, additional analysis is conducted and the annual projection is adjusted as appropriate ICR variances are communicated to and EI Management. Corrective actions are taken as required, ensuring no significant year-end financial problems result. Last Revised: 10/16/2012 Page 2

3 Sample Report sent to DA s Quarterly Last Revised: 10/16/2012 Page 3

4 Sample Budget Template used by DA s to submit original budget and change requests Last Revised: 10/16/2012 Page 4

5 Roles and Responsibilities: Director Finance Admin Managers Division Administrator Establish Budget Calendar X X Analyze Financial Results X X X Prepare Budget Estimates X X X Review & Approve Budgets X X Write Budget Narrative X X Analyze Budget Submission X Approve Budget Submission X Enter Budget in the Tool X X Monitor Budget results Quarterly X X Document History: Date Name Action Notes 10/23/10 Edie Miller Created 12/9/10 David Dvorak Edited 12/9/10 Edie Miller Incorporated edits 1/27/11 Edie Miller Edited, circulated for final comments 1/27/11 Grant Goodrich Reviewed, edits provided 1/28/11 Wanda Diaz Edits provided 1/28/11 Edie Miller Incorporated edits 1/29/11 Edie Miller FINAL 10/16/12 Edie Miller Reviewed for accuracy Last Revised: 10/16/2012 Page 5