Presentation on theme: "1 Pittsburg State University Supervisory Training Management Level Supervisors Budgeting 101 Michele Sexton, Director of Budget & Human Resource Services."— Presentation transcript:
1 Pittsburg State University Supervisory Training Management Level Supervisors Budgeting 101 Michele Sexton, Director of Budget & Human Resource Services Lauren Werner, Assistant Director of Budget Russ Hall (August 3, 2011)
2 Important Terms Allotment System: A procedure under which appropriated funds are allocated periodically to agencies when resources appear insufficient to cover appropriations. The system, authorized by KSA , is intended to assure that expenditures do not exceed available resources during a fiscal year. Appropriation: A specified amount of money for a particular purpose that an agency is authorized to spend during a fiscal year. Generally, the entire amount is available at the start of the fiscal year.
3 Important Terms Budget Programs Instruction (2010) – Colleges of Arts & Sciences, Business, Education and Technology and Continuing and Graduate Studies Academic Support (2040) – Academic administration; Library Services; Teaching, Learning & Technology; Information Systems Institutional Support (0160) – President’s Office; Provost; Vice President for Administration & Campus Life; Vice President for University Advancement, Business Office; Budget & Human Resource Services; Analysis, Planning & Assessment; Alumni Relations, Public Relations; Printing & Postal Services Research (2100) – sponsored research projects Public Service (2230) – services provided to the general community, including non-credit producing workshops and conferences. Student Support (2050) – Campus Life; Enrollment Management & Student Success; Registrar; Admission; Testing Services; Student Financial Assistance; Career Services; Intercollegiate Athletics Physical Plant (9670) – Physical Plant; Facilities Planning; University Police Student Aid (3080) -- Scholarships Auxiliary Enterprises (3791) – University Housing; Parking; Student Health Service Clearing (9393) – Duplicating & Printing Services; Instructional Media Services; Motor Carpool, Telephone Services Debt Service (9894) – Expenditures from bond funds Capital Improvements (9999) – Construction, Repair & Replacement Costs
4 Important Terms Expenditure Categories: Classifications for goods and services purchased by the state agencies Primary among these are the following: Salaries and Wages – Payment to state officers and employees for their personal services, and the state’s costs for employee benefits such as FICA, retirement contributions, workers compensation, unemployment insurance, the state leave payment assessment, and health insurance. Contractual Services – Payments for various services including communications, travel, utilities, and consultant services. Commodities – Payments for consumable materials, supplies, and parts used in the operation of the agency. Capital Outlay – Expenditure for items having a normal life of more than one year, such as office equipment, machinery, furniture and motor vehicles. Operating Expenditures – An expenditure summary category incorporating all agency expenditures, except capital improvements. Debt Service – Payments of the interest and principal included in agency budgets on various forms of debt financing, including bonded indebtedness, PMIB loans, master lease, Facility Conservation Improvement Program, third-party and other miscellaneous debt. Non-Expense Items – Disbursement such as refunds, advances and investments which do not represent government cost. Capital Improvements – Cash or debt service principal payments for construction of highways, buildings or other facilities, remodeling and additions to existing structures, rehabilitation and repair projects, razing of structures, and the purchase or improvement of land.
5 Important Terms Finance Council: A state organization empowered to act on certain matters of legislative delegation, usually when the Legislature is not in session. The Council comprises the Governor (chair), President of the Senate, Speaker of the House of Representatives, Majority and Minority Leaders of each chamber, and the Chairpersons of the Senate Ways and Means and House Appropriations Committees. Fiscal Year: The state fiscal year runs from July 1 to the following June 30 and is numbered for the calendar year in which it ends. The “actual fiscal year” is the year which concluded the previous June. The “current fiscal year” is the one which ends the coming June. The “budget year” refers to the next fiscal year, which begins the July following the Legislature’s adjournment. “Out-years” refers to the years beyond the budget year. FY 2012 – July 1, 2011 through June 30, 2012 Payroll/Appointment Dates (June 12, 2010 through June 9, 2012)
6 Important Terms Funds: Basic units of classification in both the budget process and the accounting system for agency monies. Monies in a fund may be used for a specific purpose as provided by law. Each fund is maintained in accordance with generally-accepted accounting principles with a self-balancing set of accounts recording all resources together with all related obligations, reserves, and equities. The major funds of PSU include the following: State General Fund (SGF) – A fund for revenues not earmarked or dedicated for special purposes. It is used to finance governmental operations not provided by other funds. The principal revenue source for the State of Kansas State General Fund include individual and corporate income taxes, sales and compensating use taxes, severance and other excise taxes, and interest earnings. General Fees Fund (GF) – Tuition revenue General Use (GU) - State General Fund and General Fees Restricted Fee Funds (RF) Local Funds Clearing Funds Auxiliary Funds Foundation Funds
7 Important Terms MEGA Appropriations Bill: Legislation which includes appropriations for all state agencies. Appropriation bills are effective for one year, unlike substantive statutes, which are effective on a permanent basis until amended or repealed. The MEGA bill contains supplemental appropriations and adjustments to the current fiscal year, appropriations for operating budgets for the upcoming fiscal year, and appropriations for capital improvements for the forthcoming fiscal year and any applicable out years as a multi-year appropriation. Object Code: A code used for accounting purposes in addition to a written description to describe the specific items or services purchased by state agencies within various expenditure categories. Codes are prescribed by the Policy and Procedure Manual, Filing 7,002 prepared by the Division of Accounts and Reports. Omnibus Appropriations Bill: A bill containing numerous individual appropriations for both the current and budget fiscal years that is considered during the “veto” stage of a legislative session. It finances items such as substantive legislation that passed and Governor’s budget amendments adopted by the Legislature.
8 Important Terms Revenue Estimates: Projections of anticipated State General Fund revenue for the current and budget fiscal years. An estimate is developed on a consensus basis by the Division of Budget, Department of Revenue, university economists, and the Legislative Research Department twice annually. In November an estimate is made for the current and budget years. This estimate forms the basis of the Governor’s budget recommendations to the Legislature. In the spring, prior to the end of the legislative session, the current and budget year estimates are reviewed and revised, if necessary. Shrinkage: The difference between the cost of fully funding salaries and wages in a budget, assuming all positions were filled at all times, and the actual salary costs, taking vacancies into account. Also called “turnover,” it is expressed as a percentage.
10 Budget Cycle July 1st Fiscal Year Begins September 15th Budget Request November 10th Budget Director’s Recommendation December 10 th Governors Appeal Process January 10th Governor’s Budget Recommendation January – April House & Senate Deliberations April 30th Final Budget Decisions May/June Regents Discussions For the New Year June 30th Fiscal Year Ends
11 Budget Request Timeline FY 2012 (July 1, 2011 – June 30, 2012) May - June, 2010: Finalize PSU FY 2011 Annual Budget June 24-25, 2010: FY 2012 Budget Request Proposal approved by KBOR July, 2010: Interface salary & fringe data from the FY 2011 Annual Budget to Division of Budget system for the FY 2012 Budget Request August 15, 2010: Access DOB system. Reconcile salary & fringe data for FY 2011 & FY 2012 with PSU files; Enter OOE expenditures for FY 2011 & FY 2012; Reconcile DOB and PSU files. September 15, 2010: Submit request for FY 2012 Budget in DOB system. Complete Narrative & Operating Summary. Prepare paper request for internal staff use. November, 2010: Division of Budget Recommendations December, 2010 – March, 2011: PSU Tuition Committee January, 2011: Governor’s Recommendations January – May, 2011: Legislative Activity May – June, 2011: Tuition Request Approved by KBOR May – June, 2011: Finalize PSU FY 2012 Annual Budget
12 Tracking Sheets
13 Budget Request Document Section I Authorization & Vision Statement University and Division Mission Statement PSU Strategic Plan 2007 – 2012 Performance Measures Budgetary Organizational Chart Accreditation Status Student Headcount Performance Agreements
14 Budget Request Document Section II Tables by Category and Program Fringe Benefit Rates Section III Division of Budget Forms
15 Establishing the FY 2012 Annual Operating Budget Salaries Unclassified Classified Graduate Assistants & Students Lump Sums Other Operating Expenditures (OOE)
16 Establishing the FY 2012 Annual Operating Budget Unclassified Salaries Previous FY Salaries with changes for turnover & employee movement Spreadsheets - increases and adjustments Vice Presidents KNEA Unit Approval by President Appointments Letters Issued
17 Establishing the FY 2012 Annual Operating Budget Classified Salaries Civil Service Pay Matrix Changes approved by Legislature Market Adjustments Reallocations
18 Establishing the FY 2012 Annual Operating Budget Graduate Assistants Salaries determined by Provost after tuition for academic year approved GTA salary includes tuition waiver Students Allocations for student salaries approved by the Vice President for the division
19 Establishing the FY 2012 Annual Operating Budget Lump Sum Temporary Salaries (Classified & Unclassified) SF1,CIT,CIP,Reserves Fringe Rates applied to all Salaries
20 Establishing the FY 2012 Annual Operating Budget Other Operating Expenditures Allocations approved by the Vice President for the division Balance to Tracking Sheet Opening Journal Entries / Allocations prior to July 1, 2011 FY 2012 starts on July 1, 2011
21 Monitoring the FY 2012 Annual Operating Budget Salaries Budgeted v. non-budgeted Monitored through the Electronic Appointment Process and by the Budget office Departments with Grants monitor salaries with monthly payroll reports Shrinkage
22 Monitoring the FY 2012 Annual Operating Budget OOE Monitored by the Business Office GL.LOOK in GUS
23 Budget Web Page o Budget Web Page – Budget Transfer Form – transfer between 104 & 105 only Fringe Benefit Rates – current and next FY Budget Calculator Classified, Unclassified, Students, Graduate Assistants Budget less Fringes EDC’s
24 Reports Available GUS & Axe Library Annual Operating Budgets Budget Request Budget Office Resources Position Tracking History Annual Budget Comparisons
25 PSU Funds PSU Funds State Appropriation – Fund 104 General Fees Fund – Fund 105 College Work Study – Fund 106 Restricted Fees Fund – Funds 241 and 341 University Federal Funds – Fund 351 Foundation Funds – Funds ending in 42 (e.g. 342)
26 PSU Funds Auxiliary Funds Student Health – Fund 203 Housing – Fund 201 Parking – Fund 207 Local Funds Student Center – Funds 208 and 209 Service Clearing Printing, Postal, Phone – Funds 107,108,109,110,111,112,114
27 PSU Funds Paying payroll from funds Can not pay from Foundation funds or Local funds Need to pay from a restricted fee account Reimburse restricted fee account by using a DPR to move funds from the Foundation or Local Fund. College Work Study
28 Block Grant Funding Prior to FY 2002, the Governor and Legislature established state university budgets using the general use model (SGF appropriations and tuition revenues) General use model – each institution’s budget was established by increasing its general use base using a uniform set of parameters (% for salary, OOE and enrollment adjustment) The amount of SGF required for each budget depended upon the amount of tuition generated by each institution. SGF and tuition revenue was interchangeable, and tuition monies were considered a state asset rather than an institutional asset. Placed a higher percentage of state funding at smaller institutions having relatively low levels of tuition income. General use model did not provide any of the institutions or the KBOR with the flexibility needed to more effectively manage resources and respond more rapidly to change.
29 Block Grant Funding In October, 2000 the KBOR approved a new budget model called the operating grant/tuition ownership model, under which each university would receive a state operating grant and would retain ownership of an accountability for its tuition revenue. Each university would receive an operating grant based on a request determined by the Board. Under the Board’s approval of tuition rates, each university would assess, collect and have expenditure authority over its tuition revenue.
30 Block Grant Funding The Governor adopted the new budget model for the FY 2002 budget and declared that all budgets should be developed using the operating grant model. The Governor removed the historic expenditure limitations on tuition funds, thus opening the door for tuition ownership. The 2001 Legislature gave tacit approval to the new budgeting model by endorsing the Governor’s recommendations regarding tuition funds. For FY 2003, the Board deviated from the original plan by requesting the operating grant increase be appropriated to the Board for distribution, rather than appropriated to each university.
31 Block Grant Funding Performance Agreements Senate Bill 647 was signed into law in 2002 and established Performance Agreements for Kansas public postsecondary education. Effective July 1, 2005, receipt of new state funds by each institution shall be contingent on achieving compliance with its performance agreement. Board action is taken in June of each year for funding for the new fiscal year. Performance Agreement available on the Provost’s web site: nts/PerfAgrmntCY Oct22.pdf
32 Block Grant Funding Performance Agreements & FY Funding 7/1 – 12/31/2004 (pilot program) – FY 2006 1/1/2005 to 12/31/2005 – FY 2007 1/1/2006 to 12/31/2006 – FY 2008 1/1/2007 to 12/31/2007 – FY 2009 1/1/2008 to 12/31/2010 – FY 2010 to FY 2012 1/1/2011 to 12/31/2013 – FY 2013 to FY 2015
33 Impediments to Implementation of Operating Grants Not established in statute – established by agreement and by repeated and consistent application in developing budgets. Condition of state finances has not permitted the Governor to recommend nor the Legislature to appropriate an increase to the Universities’ operating grants. Unfunded mandates Fringe Benefit changes Classified Pay Plan Global expenditure reductions (travel & equipment purchases)
34 Pittsburg State University Supervisory Training Management Level Supervisors Budgeting 101 Michele Sexton, Director of Budget & Human Resource Services Lauren Werner, Assistant Director of Budget Russ Hall (August 3, 2011)