AUBURN UNIVERSITY BUDGETING & ACCOUNTING Financial Management

1. AUBURN UNIVERSITYBUDGETING & ACCOUNTINGFinancial Management Marcie Smith, Assoc. VP for Bus & Finance Linda Pearce, Controller Teresa Vest, Director of Budget Services February 5, 2008

2. AU BUDGETING & ACCOUNTING Objectives • Financial overview of AU • Business Office introduction • Controller’s office and account structure • Administrative systems, Banner Finance • Budget Services and the budget process

3. Total FY07 Budget by Division$733.2M

4. Auburn UniversityFY07 Total Budget - $733.2M

5. Controller’s Office (Financial Reporting & Property Services) Mgmt Reporting Budget Services Student Financial Services (formerly Bursar and Financial Aid) Procurement & Payment Services (formerly Accts Payable & Purchasing) Contracts & Grants Accounting Payroll & Employee Benefits Information Systems Support AU BUDGETING & ACCOUNTING What is the Business Office?

6. Associate VP for Business & Finance Marcie Smith Exec Sec Sandra Bonney Controller Linda Pearce Director Budget Services Teresa Vest Exec Dir Procurement & Payment Services Shawn Corrigan Asmuth Exec Dir Payroll & Employee Benefits Ronnie Herring Director Contracts & Grants Accounting Sheila Duffield Exec Dir Student Financial Services Mike Reynolds Director Management Accounting Cindy Selman Director Information Systems Support Michael Miller Banner Project Dir Fred Bobo

7. Procurement & Payment Services • Responsibilities • Procurement of and payment for acquired goods and services, including compliance, proper accounting and records retention • Manage purchasing card program • Promulgate policies associated with procurement & payment • Compliance with IRS 1099 tax laws and state escheat laws • Major Projects • Enhanced control and fraud monitoring • Electronic workflow and imaging of financial documents • Challenges • Decentralized buying and receiving • Regulatory climate

8. Payroll and Employee Benefits • Responsibilities • Ensure the timely and accurate pay and all accounting of payroll & benefits for all AU employees • Manage all benefit programs • Major projects • Benefit analysis and wellness program • Post retirement actuarial update • Challenges • Cost containment of health insurance program • Decentralized time entry

9. Contracts and Grants Accounting • Responsibilities • Financial reporting and sponsor billing for all sponsored agreements • Oversees federal, state and other compliance related to financial aspects of sponsored agreements • Facilities & Administrative rate development and recovery distribution • Major Projects • Effort certification – automate & improve compliance • Development of Banner reporting • Challenges • Keeping abreast of regulatory climate • Maintaining adequate compliance in decentralized environment

10. Student Financial Services • Responsibilities • Manage student financial aid program • Bill and collect all student tuition and fees • Record revenue received by AU • Maintain student billing system • Major Projects • Implementation of Banner student info system • Integration of activities of billing/receiving with student financial aid to assure optimal cost savings and efficiencies • Challenges • Maintain complex tuition/fee structure • Maintain compliance with constantly changing Title IV Higher Education Regulations

11. Management Accounting • Responsibilities • Provide university-wide management reports and analysis • Assist units in preparing management reports • Preparation and analysis of reserve reporting • Oversee capital budgeting, deferred maintenance and debt needs • Major Projects • College/School needs assessment • Development of management reporting and presentation to campus constituents • Challenges • Defining, creating, automating management reports to meet all needs • Dissemination of information in formats acceptable to deans, department heads, financial managers, etc.

12. Information Systems Support • Responsibilities • Programming, tech support for finance and human resource systems • Desktop/server support for Business Office & other administrative units • Liaison with central information technology • Production support –data entry, print, imaging financial documents • Major Projects • Banner reporting • Budget development system • Converting AS400 data and systems • Challenges • Prioritizing to meet needs of all users in current climate of new systems • Constantly changing IT environment

13. Banner Project Office • Responsibilities • Coordinate activities of users, information technology, outside consultants, steering and executive committees in implementation • Recommend policy changes and software purchases to senior administration • Manage project budget • Major Projects • Completing student implementation for Fall 07 roll-out • Implementation of workflow and executive reporting • Challenges • Prioritization of competing demands for technical resources • Coordination of upgrades in a relational database environment

14. AU BUDGETING & ACCOUNTINGOther Financial Services • Treasury Services • Development Accounting • Alumni Accounting • Risk Management & Safety • Internal Audit

15. AU ACCOUNTING & BUDGETINGMission Statement • The mission of the Business Office is to provide leadership in the development, implementation, and continuous improvement of the business and financial services essential for Auburn University to pursue its mission of teaching, research, and outreach

16. AU ACCOUNTING &BUDGETING • Service is important • Compliance is important • Constant balancing act to do both

17. AU ACCOUNTING & BUDGETINGService and Compliance • Increased demands for financial information • Enhanced technology • Federal Regulatory Climate - IRS, Federal Sponsors, Dept of Education, Cost Accounting Standards • State regulations – travel, bid law, public works law • Governmental Accounting Standards and Financial Accounting Standards

18. AU ACCOUNTING & BUDGETINGWorld Wide Web Information • Description of each business office • Financial Policies & Procedures • Information can be found at http://www.auburn.edu/administration/business_office/ • OR on Banner site at http://auaccess.auburn.edu (will require user ID to log into Banner)

19. Controller’s Office Role of Controller’s Office

20. AU ACCOUNTING & BUDGETINGController’s Office • Our Customers: • Federal and State regulatory agencies • External auditors • Bond Agents and banks • Other Institutions for benchmarking • Internal Users - President’s Office, Vice Presidents, Deans, Directors and Department Heads and YOU!

21. AU ACCOUNTING & BUDGETINGController’s Office • Responsibilities: • Preparing annual, audited, published Financial Statements • Coordinate Financial Audit and A-133 Audit of Federal Funds, NCAA Audit • Accounting for University Assets • Cash - monthly bank reconciliations • Property, Plant and Equipment-Reported in General Ledger • Capitalized Equipment Recorded in Fixed Asset Module

22. AU ACCOUNTING & BUDGETINGController’s Office • Responsibilities continued: • Process Bond Payments and reconcile accounts related to debt service, ratio analysis • Preparation of various tax returns including 990T, sales tax and excise tax • Prepare Journal Entries for transfers and corrections, review ITV’s and DEC’s, analyze accounts, do special projects • Implement service centers policies • Key role in Banner Finance System

23. FINANCIAL SYSTEMS

24. AU ACCOUNTING & BUDGETINGBanner Basics • Banner Project • Financial System • October 1, 2005 implementation • Includes budget system, finance system, payables, purchasing, fixed assets • Training ongoing (HRD classes offered each semester), Banner Boost • Human Resource System – July 1, 2006 implementation (includes payroll, leave information) • Student Info System (Billing/Receivables) • July 1, 2007

25. AU ACCOUNTING & BUDGETINGBanner Basics • Access to systems – “AU ACCESS” is web-based with a single sign-on • Two types of access – Banner Self-Service and Banner Admin • The AU Access portal provides calendar, announcements, shortcuts to processing, policies and procedures, and other information • Many transactions can be processed electronically – purchase requisitions, budget, etc. • We are working toward being able to process imaged documents

26. AU ACCOUNTING & BUDGETING Finance System • Accumulation of hundreds of thousands of transactions in various funds, orgs, accounts and programs allows AU to meet the reporting needs for • State of Alabama • Annual Financial report • Federal funds audit • And many more….

27. AU ACCOUNTING & BUDGETINGMore Finance System • Banner Finance • Includes an accounts payable and purchasing function • Grants module for sponsored programs/project tracking • Fixed assets system for recording depreciation/Detail of Capitalized Assets • Ability to download financial information into spreadsheets for additional reporting and monitoring • Monthly and other reports delivered electronically via E-Print. Other report options coming through ARGOS reporting

28. AU ACCOUNTING & BUDGETING More Finance System • All financial information is captured in unique accounts (Now referred to as FOAP’s in Banner) • Where the money comes from, restrictions on the use placed by outsiders and how it is spent all influence the classification of dollars in the Finance System • Allows for budgeting, reporting and tracking resources received and used

29. AU ACCOUNTING & BUDGETING WHAT IS A FOAP? • Fund – assets, liabilities and fund balances identified by type (ex. Unrestricted base budget funds, plant funds, restricted sponsored project fund) • Org – revenue, expenditures and budget for a unique organizational unit. Identifies Who is spending the funds. • Account – five digits which identifies What type of revenue, expense, asset, liability, etc. • Program – identifies the function or purpose of expense (instruction, research, etc.) AND A-21 classification of expense (organized research, general administration, etc.)

30. AU ACCOUNTING & BUDGETING Example

36. AU ACCOUNTING & BUDGETING Self Service Banner • Uses traditional web browser • Easy to use and understand • Transaction processing • Use for purchase requisitions and budget transfers • Approvals routed electronically • Query • Balances for year-to-date transactions and budgets available • Only operating ledger – revenues, expenditures and budgets • Overall, limited functionality

40. AU ACCOUNTING & BUDGETING Banner Admin • Special navigation is required – training is critical • Expanded functionality • Vendor query • Fund (General ledger) information • Project basis accounts – construction and grant accounts – gives project-to-date expenses and revenues • Query and reports – downloading available

43. Auburn University Budgeting Role of Budget Services AU Budget Process

44. AU ACCOUNTING & BUDGETINGBudget Services • Auburn University’s annual financial plan is expressed as an annual budget • The office of Budget Services is charged with the responsibility for the complete Auburn University budget, including the systems used to develop and track budgets, for all divisions

45. AU ACCOUNTING & BUDGETINGBudget Process • Budget Advisory Committee • Board of Trustees - tuition increases • Legislature - passes appropriation in April • Budget Preparation - usually late June through September • Currently using online budget development system created by users and programmers at AU • Typically an incremental process

46. AU ACCOUNTING & BUDGETINGBudget Process • Individual colleges/schools and VP areas use the combination of a Banner product, “Salary Planner”, and an in-house developed system called “Stripes” to prepare the annual budget. • Budget Services balances and summarizes the budgets for presentation and approval to the Board of Trustees • New salaries are loaded into the Human Resource System • Total budgets are uploaded into the Finance system • New tools were utilized starting in the FY08 budget year

47. AU ACCOUNTING & BUDGETINGBudget Year • October 1 is the beginning of the fiscal year • September 30 is the end of the fiscal year

48. AU ACCOUNTING & BUDGETING Budget Changes • Budgets can be modified throughout the year by processing budget changes online in the Banner System (AU04) • Instructions to web-based system found on the Budget Office website: www.auburn.edu/budget

49. AU ACCOUNTING & BUDGETINGBudget Carryover • Unused Budget can be carried forward and spent in future fiscal years • Provides incentive • More efficient/effective use of funds

50. AU ACCOUNTING & BUDGETINGBudget Carryover • Reserve reporting is done annually to summarize carryover and resources available to each unit • Units are encouraged to use existing resources for one-time needs