University Budgets From an Academic Department Perspective October - PDF document

9/28/2015 University Budgets From an Academic Department Perspective October 2015 1 Recording date of this workshop is October 1, 2015 Some of the rules and procedures discussed in this workshop are subject to change. Please check university resources before relying exclusively on this recorded presentation. Goals • To alter your negative perceptions on “Bean Counting” and “Bean Counters” • To reveal the secrets of the budget statement and make them meaningful. • To create an intimacy between you and “PBL”, “Accruals”, “F&A Accounts”, and “Endowments”. • I’ll share definitions, helpful hints, and even suggest ways to manage your budgets • I’ll show you where to find meaningful data that measures department productivity. 3 1

9/28/2015 udget + Project = Account Formula: Allocations – Expenses – Encumbrances = Balance 1374 Budgets 45,066 Accounts 4 33 Accounts per Budget Program/Subprogram Code 5 Programs 1 through 10 are State Funds Programs 11 through 14 are Grants an Student Fees and Service Centers Gift Accounts (Also called 17 A Accou 6 2

9/28/2015 7 Program 12 are Equipment Grants 8 9 Object Titles Object Codes are Sorts that Occur within the Account Statement 3

9/28/2015 Sub Object Sub Object Titles Codes 10 Budget Statement Layout • Expense Summary by Object • Expense Summary by Object/Subobject • Expense Detail By Object/Subobject • Revenue by Source Subsource • Revenue detail 11 12 4

9/28/2015 13 14 PBL –State Funded Budget (Covet PBL) • Permanent Budget Level or Permanent Base Level or Permanent Base Line (PBL) • PBL applies only to your State funded Budget • Departments normally receive the same PBL allocation each year and may include any of the objects. PBL reoccurs, which makes it very special. • A Mass Salary Increase (MSI) will increase your PBL • A Budget Cut will Decrease your PBL • Not all funds in your state accounts are PBL. State accounts also have temporary allocations which are normally one time allocations that you cannot depend on reoccurring. Unfortunately PBL is becoming extinct because of many years of budget cuts. • F&A returns are considered temporary state funds. 15 5

9/28/2015 Accruals • Only occurs on State Funded, PBL Positions • Each PBL position is given an allocation which is reduced each pay period. (mini-budget) • Accruals are the difference between the allocation and expenses for PBL positions. – Vacant positions – Professional Leave – PBL Faculty paid with grant funds • PBL positions are tracked centrally and by your area. • Some accruals automatically come back to your area, some are retained centrally for four months and only returned upon request. • You need to know all about accruals. Getting accruals back in your department is one of the few ways to obtain PBL! • SEE Executive Policy Manual, Policy #3, Salary Accruals and Adjustment Policy and Procedure. Gives you all the detail governing accruals. 16 Some Definitions and Helpful Tidbits • The fiscal year runs from July 1 to June 30 • The fiscal year is identified the year it ends. (7/1/2012 to 6/30/2013 = Fiscal year 2013) • The biennial always starts on an even fiscal year, however, because the beginning of that fiscal year is 7/1 of the previous calendar year, the biennial is often referred to as “Biennial 2011- 2013” when in fact it is fiscal years 2012 and 2013. • Carry Forward (Object 19). Balance at fiscal year end, positive or negative, is “carried forward” into the new fiscal year. Applies to most accounts except Grant and Contract accounts which must be spent by end date and Omnibus Equipment which must be spent by the end of the biennium. • Object 07 (Benefits) are free on your State Funded Accounts. (Programs 01 through 10) 17 Account Automatic Allocation cancels Expenses!! Free 18 Employer Contributions (Fringe Benefits) 6

9/28/2015 F&A accounts • F&A Accounts = Facilities and Administration- generated from Grants and Contracts. They are in Program 06, considered state funds, project always starts with 99_ _. Projects for regular state funds start with 00_ _. F&A used to be overhead, then changed to Indirect Costs, now F&A. • MTDC (Modified Total Direct Costs) was 50% effective 7/1/2011 through 6/30/2012, then 51% from 7/1/2012 - ? 19 20 Suggestions for Managing Accounts G olden R ule: Thou shall not overspend thy account without • Chairperson prior approval. (You want a plan to cover all deficits!) • Make sure every account in your department has a person responsible for it. (That person may be you) Remember YOU are ultimately responsible for the total bottom line of all accounts assigned to your department. • Hire, and support a good fiscal person. That person should provide every person responsible for an account with: – $ available to spend – Forecasts for the year – Regular financial updates – A financial operation that is in accord with university, state, and federal polices, procedures, regulations and laws. – A monthly Reconciliation of each account! 21 7

9/28/2015 Managing Accounts (Cont) • Divide and Conquer – Anytime you have a special project or an expense that is substantial and ongoing, have your finance person create another project for it and delegate budget responsibility to a faculty or staff member. • Possible PBL $$$ savers. – Look into creating student fee accounts (15F) for expenses incurred in student laboratories – Service Centers (15T) are break even operations designed to bring income to offset expenses. – Revisit your departmental policy on F&A Returns. – Tax Exemption on research equipment. (Washington State taxes itself 7.8%!!.) • Document all commitments, both to you and from you and make sure your finance person is copied! • Carefully spell out who pays for every financial detail of a job offer letter and make sure your financial person is copied. • Get Business Objects this year. (It is free now.) The cost was ~$1800 !! 22 Enrollment Funding • Base Year is 2010-2011(the year before the big increase in # of Freshmen) This includes both face to face instruction and DDP for undergrad courses. • AAFTE (Annual Average Full Time Equivalent) = Undergraduate Courses (100 – 499) Credit Hours/ 30 based on Official Enrollment Day Enrollment snapshots • Each College gets a $ Amount for each AAFTE above the Baseline. • Grad DDP Courses get a higher amount but have the same Base Year. 23 Endowments, Gift Accounts, The Foundation • It takes $25,000 or more to establish an endowment. (Program 17D) You don’t spend out of your endowment account, in fact it is not in “balances”. • Quarterly distributions are made from an endowment to a “spendable account” based on a 30 month running average of endowment earnings. • A portion of the earnings is retained by The Foundation who manages the endowment investments and coordinates activities. • The remainder is put back into the endowment. • “Underwater Endowments”… when Market Value is less than Principal value, some gift agreements stop quarterly distributions to spendable accounts. 24 8

9/28/2015 Quarterly Distributions Spendable Account 25 How is my Department Performing? For Access to all of these, contact Fran Hermanson, Institutional Research, franherm@wsu.edu • Oklahoma Salary Survey • Peer Institutions • Academic Profiles Data • And Much Much More!!!! 26 27 9