Session will provide participants an introduction to the planning and budgeting process. At the end of the session, participants will understand a typical institutional planning process, the role of budgeting in the overall planning process, and how to manage your units budget.
Purpose of Planning To assist the entity in designing and then achieving its mission, goals and objectives. To identify and allocate the resources needed to achieve our goals, and to help us avoid risks.
Benefits of a Well-Structured Planning Process Clearer direction and purpose Increased accountability (taking ownership of actions & outcomes) Tool to measure success Ability to deal with change and unknowns
Strategic Planning Clearly defining the mission and vision statement for the organization Identifies where we are going and how we will get there Strategic plans are long term, flexible, and involve many levels of the organization.
Operational Planning Operational plans are short term and narrow in scope, dealing with the operational activities of the organization. Annual operating budgets are derived during the operational planning phase.
"A budget is just a method of worrying before you spend money, as well as afterward." Unknown
What is Budgeting? The continuous cycle of planning and evaluation used by an entity in order to achieve the stated goals and objectives of the organization. The process of allocating a finite amount of resources to the prioritized needs of the organization. A tool we use to control spending decisions.
Why is Budgeting Important to the Entity? A comprehensive planning process is vital due to the scope and diversity of operations conducted in higher education. Budgeting improves decision making by delegating spending authority and providing accountability. Budgeting allows management to monitor where the organization is by tracking and evaluating spending decisions.
Board of DirectorsBudget CommitteeBudget Director, Budget OfficeVice Presidents, Deans Directors, Managers, Other Unit Leaders
Capital Budget Requests for large assets which create major demands on an entitys cash flow Buildings, renovations, automobiles, software systems, furniture Purpose to allocate funds, control risks in decision making, and set priorities Operating Budget Revenues and expenses for the various cost centers within the organization Budgeted amounts divided into major categories such as revenues, salaries, benefits, and non- salary expenses. Encompasses supporting information such as staffing and head counts Cash Budgets An estimation of the cash inflows and outflows for a specific period of time. Used to assess whether the entity has sufficient cash to fulfill regular operations Identifies whether too much cash is being left in unproductive capacities
Planning Communication Establish Program Objectives Develop Detailed Budget
PlanningCommunication Establish Program Objectives Develop Detailed Budget Compilation and Revision Budget Committee Review and Approval
PlanningCommunication Establish Program Objectives Develop Detailed Budget Compilation and Revision Budget Committee Review and Approval Board Approval Implementation and Management
Not establishing program objectives prior to building the budget Preparing a budget that is based solely on prior year numbers Over-estimating revenues or under- estimating expenditures Spreading expenditures evenly over the fiscal year Not planning for one–time expenses Not budgeting for reserves (auxiliary operations) Ignoring a well- prepared budget
It is always better to know where your money is supposed to go rather than asking where it went. Unknown
Financial Reporting The process of providing information to assist users in comparing planned revenue and expenses to actual revenue and expenses.
Financial Monitoring Review and analysis of the financial statements to determine whether resources were used in accordance with the adopted budget and whether the unit was effective in obtaining the stated goals and objectives.
Responsible Financial Management Be knowledgeable of your budget. If you dont build your own budget, make sure you understand what assumptions were used. Use a budget worksheet or the available financial statements to monitor your revenues and expenditures Identify potential risks to your budget as early as possible. Keep your supervisors informed.
Responsible Financial Management You are a steward of the universitys resources, so handle your units budget as if it were your own checkbook.
Disclaimer: This is not our travel policy! Recession Humor
Due to the current financial situation, changes will be made to the Business Travel standards and Procedures Manual. Effective Monday, the following revised procedures apply: Lodging All employees are encouraged to stay with relatives and friends while on business travel. If weather permits, public areas such as parks should be used as temporary lodging sites. Bus terminals, train stations, and office lobbies may provide shelter in periods of inclement weather. Transportation Hitchhiking is the preferred mode of travel in lieu of commercial transport. Luminescent safety vests will be issued to all employees prior to their departure on business trips. Bus transportation will be used only when work schedules require such travel. Airline tickets will be authorized in extreme circumstances and the lowest fares will be used. For example, if a meeting is scheduled in Seattle, but the lower fare can be obtained by traveling to Detroit, then travel to Detroit will be substituted for travel to Seattle.
Meals Expenditures for meals will be limited to an absolute minimum. It should be noted that certain grocery and specialty chains such as Costco and Sams stores often provide free samples of promotional items. Entire meals can be obtained in this manner. Travelers should also be familiar with indigenous roots, berries, and other protein sources available at their destinations. If restaurants must be utilized, travelers should use "all you can eat" salad bars. This is especially effective for employees traveling together as one plate can be used to feed the entire group. Miscellaneous All employees are encouraged to devise innovative techniques in effort to save company dollars. One enterprising individual has already suggested that money could be raised during airport layover periods which could be used to defray travel expenses. In support of this idea, red caps will be issued to all employees prior to their departure so that they may earn tips by helping others with their luggage. Small plastic roses and ball point pens will also be available to employees so that sales may be made as time permits.
Fred Nesler, Creighton University Budget Director Ron Rael, Creating Great Budgets: A Review of Budget Basics (an AICPA CPE Express Course) NonProfits Assistance Fund: NAF Financial Foundations