13-07-2013, 12:50 PM
Budget Guidelines
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Budget Overview
The budget is a financial plan for the university that quantifies the resource allocation plan for the next three fiscal years. The budget process begins in early fall of each year to develop the budget for the following fiscal year as well as projected budgets for the next 2 years. Budgeting at the unit level is a decentralized process. Each unit is responsible for building its’ own budget. The allocation letter, in addition to various other data collected at the unit level, is essential to completing this process. Central administration distributes the allocation letter, which includes the assumptions and the initial allocation amount. All units' budgets are reviewed and compiled by the Budget and Financial Planning Office. The result is an overall university budget that is taken to the Board of Trustees for final approval in May.
Budget Assumptions
The assumptions that feed the budget process are: tuition rate increase, financial aid, gift revenue, overhead rates on sponsored projects, the salary pool, the benefit rate, capital requirements, and the endowment distribution.
Central Allocation
The colleges and major administrative units receive an annual allocation of funds to support their operating budgets. The allocation amount is incremented each year based on the assumptions and any other known factors. The initial allocation letter are sent to the units in the early fall. The units use the information contained in the allocation letter to build the budgets for the upcoming fiscal year. For most of the colleges, the majority of the allocated amount is used to support faculty salaries. In addition to the lump-sum allocation, the colleges also budget for additional revenue sources and expenses based on the specific activities of their organization. Following each financial review, the allocation letters are revised to accurately reflect the changes in assumptions and any other items that were agreed upon during the financial review.
Information to Start Your Budget or Forecast
Before beginning a budget or forecast, it is important to have a knowledge of the organization or business, including its current financial status. Input from department management, principal investigators, system support, and faculty who control significant funding from any source (including discretionary funds) is key. Additional data for financial analysis can be found in financial reports such as operating statements, funding source detail and financial review reports. Budgets are uploaded into Oracle through Application Desktop Integrator (ADI).
Budgeting by Funding Source
Each college or administrative unit has a diverse organizational structure. Therefore, the approach to begin a budget will vary according to these needs. For example, certain funding or expense types may be the largest part of the budget and dictate the budgeting criteria. Most often, the source of funding will be the determining factor. The following sections outline issues and guidelines to consider when budgeting in each funding source.