May 21, Budget Activity Budget Roll Forward Relationship to Reserves Year End Training May 21, 2007
D. Brothwell, CPSLO2 Same World Different Perspective The view of the world by the Budget Office The view of the world by the accounting office
May 21, 2007D. Brothwell, CPSLO3 Systemwide Allocation Transfers - SWAT SWAT documents are a notice to the campus budget office that additional cash will be deposited into the campus CSU Operating Fund –Budgets should be recorded to reflect the new revenue and the corresponding spending authority – net zero The revenue will be recorded in FIRMS object code –Funds could also be transferred out would be used
May 21, 2007D. Brothwell, CPSLO4 SWAT Accounting Entries Either a CPO or an AD-NOAT never both, CPO = Cash/Investment entry, AD-NOAT = FBC entry. Both credit the same revenue account (506100)
May 21, 2007D. Brothwell, CPSLO5 SWAT Budget Entries Budget is posted to regardless of the method of deposit (AD- NOAT or CPO) then recorded for expenditure in the receiving departments accounts
May 21, 2007D. Brothwell, CPSLO6 Balance in SWAT accounts should be zero
May 21, 2007D. Brothwell, CPSLO7 Definitions Budget Balance Available (BBA) CSU Fund 485 Budget – Actuals – Encumbrances = BBA If Revenue and Expenditures Budgets NET to Zero, then BBA + Encumbrances = Fund Balance
May 21, 2007D. Brothwell, CPSLO8 Establishing Reserves in Actuals Ledger 485 – CSU Operating Fund Reserve Entire Fund Balance –Ensure the merry-go-round has stopped Accounting - no more entries to impact Fund Balance Budget Office - no more entries to impact BBA –Allow Time to Calculate Each Reserve Amount –Includes all your CMS Funds within 485 –This is a Journal Entry in Actuals Only before Close –The 304XXX Object Codes Must Net to Zero
May 21, 2007D. Brothwell, CPSLO9 Budget Considerations Does your campus sweep budget balances (BBA) to contingency or roll them forward to the department –PeopleSoft Fund does not change from year to year so any differences between what was accrued and what is paid in the subsequent year will be processed within the users account
May 21, 2007D. Brothwell, CPSLO10 Budget Considerations Managing Contingencies –Campuses historically manage contingencies thru the budget process. Prior year savings will be a reserve amount in fund equity Budget offices will more than likely establish a budget for this in order to manage the allocations and the transfers to departments in the subsequent year This budget will not be recorded in the reserve account Pre-closing reserve entries per “Interim Guidelines”
May 21, 2007D. Brothwell, CPSLO11 Required Reserve FIRMS Object Codes for CSU fund – Reserve for Encumbrance – Campus/Dept Commitments – Designation and Contingency Reserve – Reserve Offset
May 21, 2007D. Brothwell, CPSLO12 Cal Poly
May 21, 2007D. Brothwell, CPSLO13 Sample Reserve Account Definitions (Cal Poly Perspective) – Reserve for Encumbrance –Amount equals the total encumbrances in the SAM 6 for the CSU Operating Fund (CSU Fund 485) – Reserve for Division Commitments –Amount is equal to the budget balance available for roll forward to campus divisions ( AAT Key) – Reserve for Campus Obligations –Amount is equal to the budget balance available for roll forward to campus contingency ( AAT key) – Unallocated Campus Reserves –Represents amounts that will not be budgeted in the subsequent year and are truly unallocated ( AAT key)
May 21, 2007D. Brothwell, CPSLO14 Sample Reserve Accounts AAT Mapping (Cal Poly Perspective) Amounts in , and will be budgeted in the subsequent year, $7,739,846.
May 21, 2007D. Brothwell, CPSLO15 Sample Year End Report – Cal Poly Perspective Net income will close to fund balance in the amount of $8,739,846 Encumbrances plus balance available equal the amount to be reserved (Fund Balance)
May 21, 2007D. Brothwell, CPSLO16 Sample Trial Balance for CSU Operating Fund as of Sum of the 304XXX FIRMS Object Codes must net to zero
May 21, 2007D. Brothwell, CPSLO17 Sample New Year Budget The sum of , and is $7,739,846.
May 21, 2007D. Brothwell, CPSLO18 Sacramento State
May 21, 2007D. Brothwell, CPSLO19 Establishing Reserves in Actuals Ledger 485 – CSU Operating Fund (continued) Encumbrance Balance at June 30 th –Ledger KK_DTL_ENC – Query from Ledger_KK Can Obtain JE Detail by PS Fund Value –Needed if you are using multiple CSU 485 Funds SAM 6 – Encumbrances Column SAM 7 – State Accruals Column Balances
May 21, 2007D. Brothwell, CPSLO20 Establishing Reserves in Actuals Ledger 485 – CSU Operating Fund (continued) Determine amounts Designated for Program, Project or Organizational Unit –BBA for these areas per Campus Policy Departmental Level Division/Program Center Level Sweep to Central Pool –Sac State Perspective Program Centers (like Colleges, HR, Student Affairs, etc.) –Budget Balance Available Adjusted for »All University Expenses (AKA Designated-Line Items) »Work Study Excess
May 21, 2007D. Brothwell, CPSLO21 Establishing Reserves in Actuals Ledger 485 – CSU Operating Fund (continued) Remaining amount will be designated for Operations and Contingencies –Sac State Perspective Fund Balance less / Reserves Amount not rolled into next year’s budget – Fund Balance Offset –Debit amount to = – Debit Amount = Credit Amount
May 21, 2007D. Brothwell, CPSLO22 Establishing Reserves in 485 (cont.)
May 21, 2007D. Brothwell, CPSLO23 Sacramento State’s Perspective Reserve amounts are determined at Year End in Fund 485 (CSU Operating Fund) –Encumbrance Reserve (Object Code ) SAM 6 (Encumbrance column total) KK_DTL_ENC table –Query Amounts by Chart Fields it against SAM 6 Total –Program/Project/Organizational Unit (Object Code ) Calculated Budget Balance Available to Divisions University-wide Use Fund –Operations & Contingencies Reserve (Object Code ) Amount not budgeted for use in the next fiscal year
May 21, 2007D. Brothwell, CPSLO24 Sacramento State’s Perspective
May 21, 2007D. Brothwell, CPSLO25 Sacramento State’s Perspective To Zero Out Budgets or Not to Zero Out Budgets…That is the Question –Our campus chose Not to Zero Out Budget Amounts Revenue budget is less than expense budget –Not budgeting PY roll forward reserve on revenue side Under the SAM6 Budget Column: –Net Budget = Prior year budget roll forward reserves or –Net Budget =
May 21, 2007D. Brothwell, CPSLO26 Sacramento State’s Perspective Revenue Budget Setup in Fund 485 –Building Your 2007/08 Budget Fee Revenue Projections $67.5 M Other Revenue $1.5 M Total: $69.0 M
May 21, 2007D. Brothwell, CPSLO27 Sacramento State’s Perspective Revenue Budget Setup – Fund 485
May 21, 2007D. Brothwell, CPSLO28 Sacramento State’s Perspective Expense Budget Setup in Fund 485 –Using a Global DeptID Distribute 2007/08 Budget - $228 M: –State Appropriation = (-$160 M using ) –Fee Revenue = $66 M –Other Revenue = $1.5 M Distribute your Reserve Budgets
May 21, 2007D. Brothwell, CPSLO29 Sacramento State’s Perspective Expense Budget Setup – Cont’d –Create CMS Expense Accounts to Separate your Reserve Amounts (e.g. $2.4 M) Encumbrance (304018) Division/Organizational Unit (304016) University-wide Use Fund (304016) Map Accounts to
May 21, 2007D. Brothwell, CPSLO30 Sacramento State’s Perspective Spreading the Reserves: – Encumbrance $400K Allocation Process in CMS (Ledg_KK_Enc) Query and upload into CMS – Division/Organizational Unit $1.5M Use Unique Scenario Chart Field to spread budget to Divisions – University-wide Use Fund $500K Total: $2.4M
May 21, 2007D. Brothwell, CPSLO31 Sacramento State’s Perspective Expense Budget Setup – Fund 485
May 21, 2007D. Brothwell, CPSLO32 Sacramento State’s Perspective Total Budget Setup – Fund 485
May 21, 2007D. Brothwell, CPSLO33 Sacramento State’s Perspective Differences Between Zeroing Out and Not Zeroing Out Budgets on SAM6 Report –Zero Out Budget Net Budget Column = 0 –Don’t Zero Out Budget Net Budget Column = Prior Year Roll Forward Reserve Budget –Sum of Total Expense Budget Balance Available = Net Budget Balance Available
May 21, 2007D. Brothwell, CPSLO34 Sacramento State’s Perspective Sample 2007/08 Year End Snapshot:
May 21, 2007D. Brothwell, CPSLO35 Sacramento State’s Perspective Sample comparison spreadsheet –Zero Out vs Don’t Zero Out Reserve Budgets See EXCEL attachment
May 21, 2007D. Brothwell, CPSLO36 CSU Monterey Bay
May 21, CSUMB Perspective Year End & Year Beginning Most decision points for budget operations are the same or similar to SLO and Sac State –In , revenue & expense budgets net to zero –At year-end, revenue budget adjusted to equal actuals –Expenditure BBA plus encumbrances = fund balance (after obligations)
May 21, CSUMB Nuances Related to Sweeping Balances Revenue Required in Fund 485 –“Remap” trust projects to Fund 485 New fund code in old FNAT mapping Change FNAT key to Fund 485 for historical fund code Journal entry from historical fund code to new fund code, thereby satisfying beginning year fund balance edits Historical fund code journal entry has transfers in and no beginning fund balance –Impact to Fund 485 – Multiple Fund Codes
May 21, CSUMB: RESERVE ENTRIES Definitions Similar to SLO and Sac State – – Reserve for Encumbrances – – Reserve for Campus/Dept Obligations – – Reserve for Campus Contingency – – Fund Balance Offset –Net to Zero
May 21, CSUMB: RESERVE ENTRIES All Entries Now 3-Dimensional Analysis Due to Multiple Fund Codes and Entered at Fund Code Level –Reserve for Encumbrances SAM 6 (Encumbrance column total) – Represents Total of All 485 Campus Fund Codes KK_DTL_ENC table – 485 Campus Fund Code Specific –Query Amounts by Chart Fields Total against SAM 6 Total –Reserve for Campus Obligations Queries set up in advance for trust project fund codes for revenue and expense actuals as well as main operating fund –Reserve for Campus Operations & Contingency
May 21, CSUMB: BUDGET POSTING MAIN OPERATING FUND Current Year Revenue and Expense Budget Will NOT Net to Zero Budget Equal to Encumbrance Reserve Posted with Unique Scenario –Exploring Distribution in Arrears to Payment Budget Equal to Reserve for Campus Obligations Posted and Distributed with Unique Scenario
May 21, CSUMB: BUDGET POSTING MAIN OPERATING FUND End up looking the same as non-sweep campuses HOW we get there is different…..and HOW we administer reserves is different