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Indiana University Overview of Budget

Indiana University Overview of Budget. June 19 Presentation Campus Administrative Training Series Chris Puckett. Budget Overview. What is a Budget and How is it Used? Unique Budget Orientations of Various Fund Groups Types of Budgets Where/how is the Budget Used? The Budget Cycle.

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Indiana University Overview of Budget

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  1. Indiana UniversityOverview of Budget June 19 Presentation Campus Administrative Training Series Chris Puckett

  2. Budget Overview • What is a Budget and How is it Used? • Unique Budget Orientations of Various Fund Groups • Types of Budgets • Where/how is the Budget Used? • The Budget Cycle

  3. What is a Budget? • Definition from Webster’s New World Dictionary: Budget - “a statement of the financial position of a sovereign body …. based on detailed estimates of planned or expected expenditures …. and proposals for financing them” NOT AT IU!

  4. Why Budget?(What functions does it serve?) • Ideas?

  5. Unique Orientation of Budget • General Fund (10) represents the fundamental academic mission • Designated/Restricted Funds (2x) increasingly significant, segregated based on source of funds and intended uses • Contracts and Grants (4x/5x) externally-sponsored funding for research efforts • Auxiliary & Service (6x) business enterprises maintained for the convenience of faculty, staff and students

  6. General Fund Designated and Restricted Contracts and Grants Auxiliary and Service All aspects budgeted in detail if more than $10,000 annual operations or if personnel are paid only salaries in BC; nothing loaded to G/L base budget Budgeted in detail, by month if desired IU’s Base Budget(Policies and Practices)

  7. Indiana University2002-03 Base Budget

  8. Indiana University2002-03 Base BudgetGeneral Fund • State Appropriation $ 495,753,230 42% • Student Fees 524,756,794 45% • Other Income 147,328,42713% • Total Funds Available $ 1,167,838,451 • Compensation $ 722,568,114 62% • General Expense 413,339,093 35% • Capital 31,931,2443% • Total Allocations $ 1,167,838,451

  9. College of Arts and Sciences2002-03 Budget

  10. Types of Budgets • July 1 Base Budget • Adjusted Base Budget • Current Budget

  11. Types of Budgets • July 1: • “Plan” presented to Trustees for approval • State appropriation request – modified! • Fiscal Analysis reported to Trustees • Official external reports • Comparative analyses and time series

  12. Types of Budgets • Adj. Base: • Basis for permanent changes in budget allocations • Examples? • Starting point for budget construction

  13. Types of Budgets • Internal management tool • standard reports and FIS screens • Fiscal Analysis preparation • Year-end reversions and carry-forwards • Purchasing: availability of funds • Current

  14. Current Budget at Year-End Other than carry-forward of in-process items such as purchases that should have been completed but were delayed…. The current budget for next year is increased to accommodate the acquisition of these items without drawing against that year’s current budget Disappears!!!

  15. The Budget Cycle July 1 Base Budget Budget Adjustments: base current Budget Construction Year-end Reversions Plans Actual Adjusted Base Current Budget Long-term Short-term

  16. Budget Overview • Questions?

  17. Indiana UniversityThe Budget Construction Process Campus Administrative Training Series June 19, 2003

  18. The Budget Cycle July 1 Base Budget Budget Adjustments: base current Budget Construction Year-end Reversions Plans Actual Adjusted Base Current Budget Long-term Short-term

  19. The Budget Cycle July 1 Base Budget Budget Adjustments: base current Budget Construction Year-end Reversions Plans Actual Adjusted Base Current Budget Long-term Short-term

  20. Budget Construction Process • Review the base budget & develop budget planning models • Develop budget guidelines • Estimate resources available • Allocate resources to planned uses • Perform detailed budget construction • Obtain Trustee approval of budget • Upload budget and salaries to systems

  21. Budget Construction Process • Timeline: • December to June! • Players: • UBO, VP&CFO and President • Campus, with input from RC’s • External Constituents • Account managers and departmental • administrators

  22. Base Budget and Planning • Model realignments and reorganizations

  23. Base Budget and Planning • Model realignments and reorganizations • Apply preliminary planning parameters

  24. Base Budget and Planning • Model realignments and reorganizations • Apply preliminary planning parameters • Develop initial proforma budgets

  25. Base Budget and Planning • Model realignments and reorganizations • Apply preliminary planning parameters • Develop initial proforma budgets • Identify future needs and potential reallocation opportunities

  26. Base Budget and Planning • Model realignments and reorganizations • Apply preliminary planning parameters • Develop initial proforma budgets • Identify future needs and potential reallocation opportunities • Adjust proforma budgets • Detailed base/CSF Tracker reviews! • Adjust proforma budgets

  27. 2. Develop Budget Guidelines • Calculate pooled benefit rates • Document known factors such as state appropriation and debt service payments • Obtain Trustee approval for instructional fee rate increases and salary guidelines • Identify inter-campus support levels • Summarize institutional strategic initiatives

  28. 3. Estimate Resources Available • State appropriations - defined by state legislature • Student fees - based on enrollment projections and student fee rate increases • Other earned income: • interest income - as available and moved to GF • gift income - projected to be moved from IUF • sales and services - based on projected levels • indirect cost recovery - earned from C&G accounts • other - as projected

  29. 4. Allocate Resources • Compensation - salary guidelines and known workforce changes, application of pooled benefits • Financial Aid - student fee rates & campus programs • Other expenditures: • energy & utilities - provider rates & growth • S&E - as needed and supportable from revenues • budget allotments/assessments - campus-defined • univ. tax/insurance/IUF Development fee - from institutional guidelines • capital - as required, UITS strategic plan

  30. 5. Detailed Budget Construction • FIS electronic application • automatic calculations • pre-defined routing structure for review and approvals • reporting and download options • Detailed reviews performed by schools, campuses, UBO • conformity with guidelines regarding operating levels and salary-setting parameters

  31. Closure of Cycle 6. Obtain final Trustee approvals • “Request” becomes “July 1 Budget” upon approval 7. Upload budget and salaries to systems • Object code data loaded to the general ledger • Salary data loaded to the payroll system

  32. Budget Construction • Questions?

  33. Indiana UniversityBudget Administration andYear-End Closing Campus Administrative Training Series June 19, 2003

  34. The Budget Cycle July 1 Base Budget Budget Adjustments: base current Budget Construction Year-end Reversions Plans Actual Adjusted Base Current Budget Long-term Short-term

  35. The Budget Cycle July 1 Base Budget Budget Adjustments: basecurrent Budget Construction Year-end Reversions Plans Actual Adjusted Base Current Budget Long-term Short-term

  36. Budget Administration • July 1, 12:00:00 am Base Budget = Adjusted Base = Current Budget • July 1, 12:00:01 am Adjusted Base • Permanent changes realized post-budget construction should be made Current Budget • Increased for encumbrances (and other funds) carried forward • May have significant realignments for current year planned activities

  37. Budget Administration • Campus-wide sufficient funds checking • General Fund: • Budget is primary control mechanism • For daily management/operations, current budget rules! • Often, compensation and financial aid controlled by RC’s • S&E, capital, travel and wages more discretionary at departmental level • Non-General Funds: • Most are “cash control”

  38. Budget Administration • Sufficient Funds Checking: • General Fund(10) and FEMP (28) – overall expenditure available balance • Non-General Funds(2x) – cash, after encumbrances and pending documents • Auxiliary and Service (6x)/External Agency (97) – no sufficient funds checking

  39. Budget Controlled: Current Budget Less: Actual Transaction Total Encumbrances Pending Documents Equals: Funds Available Cash Controlled: Cash Balance Less: Encumbrances Pending Documents Equals: Cash Available Budget AdministrationSufficient Funds Checking Calculation

  40. Budget Administration • Where to find balance information: • FIS balances screens (in menu, “Inquiries”, “Balances”) • Balances by Consolidation – for big picture, can drill down to detailed transactions • Available Balances – for object code detailed info • Pending Ledger Entries – for in-process items • Open Encumbrances – detail info available • Cash Balance – shows July 1 and current

  41. Budget Administration • Some Guidelines: • Transactions between GF accounts processed on a Budget Adjustment (TF if across charts) • Transactions between GF and other accounts processed on a Transfer of Funds using 5199/1699 • Cannot transfer funds out of FEMP (28) or C&G (4x or 5x), use DI or GEC to move expenses • See Handout for more examples

  42. Closing: Big Picture • Snapshot of the University at a certain point in time (June 30) • Required by external constituents to have an official periodic view of operations and fiscal stability • Net of revenue and expense balances (operating margin) calculated • Revenue and expense balances eliminated • Asset, liability and fund balance absorb net operating margin for that year

  43. Closing: Closer to Home • General fund operating results evaluated • Balances either carry forward in departmental account or revert to RC • Compensation and financial aid balances generally revert • Other expense categories - If budget available to cover encumbrances, balance carries forward to subsequent year

  44. Closing: Closer to Home • All non-GF negative cash balances MUST be covered • Trustees want this process 2x/year • Likely sources of funds: • IUF gift funds • Commitments from department/RC/campus offices • May result from timing of sales or other revenue sources

  45. Closing: Closer to Home • Most activity is handled at the RC level • Continues through most of July, so we have two years of activity running parallel for a few weeks • At “final closing”, subsequent year beginning balances loaded and available for use and/or review

  46. Budget Administration and Closing • Questions?

  47. References • CATS Website: http://www.indiana.edu/~bfarp/ • IU Fact Book: http://factbook.indiana.edu • Budget Policies: http://www.indiana.edu/~vpcfo/policies/budget • Operating Appropriation Request: http://www.indiana.edu/~state • Budget Construction: http://www.fms.indiana.edu/fis/documentation • Bloomington BOG Report Group: http://www.fms.indiana.edu/fdrs/bog.asp

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