Capital University

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Capital University

• Budget Workshops
• December 2002 and January 2003

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Agenda

• Definitions of commonly used budgetary terms
• Timeline for preparing 2003-04 budgets
• Information regarding the creation of a three
  year budget model
• Answers to those questions youve always wanted
  to ask, but didnt

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Purpose of Budget Workshops

• To discuss the definitions, process, and timeline
  for the developing the 2003-04 budget.
• Emphasize that our budgets should be
• a numeric expression of our action plans for the
  year
• adjusted to choose line items (object codes) that
  accurately reflect the transactions that will
  occur
• differentiated between those that are general
  instructional or operational (e.g. Biology or
  Admissions) versus net revenue centers (e.g.
  Community Music School) and
• developed for unrestricted and restricted funds.

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Definitions

• Account number 12 digit number broken down into
  the following sub numbers
• When supplying an account number, you must use
  all 12 digits
• xx-yyyyy-zzzzz
• xx Fund number
• yyyyy Department number
• zzzzz Object (line item) Objects starting
  with a 7 are expense objects, objects starting
  with a 6 are revenue budgets
• 21-40405-71604 represents
• 21 Unrestricted fund
• 40405 Finance Office
• 70101 Administration - FT

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Definitions (continued)

• Unrestricted Account (Fund 21) All General
  Instructional and Operating Expenses, such as
  departmental budgets
• Restricted Account (Fund 22) Any account
  restricted in its usage
• Agency Account (Fund 60) An account that the
  university is holding for others as a custodian,
  such as student organization accounts
• Budget Manager any person who has budget
  responsibility for a departmental (yyyyy) budget
• Fungible interchangeable

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Definitions (continued)

• Labor objects (line items) any object (line
  item) between 70101 and 70244 except 70134
  through 70137, which are student wage line items
• Labor objects are NOT budgeted by the budget
  manager, but are instead developed centrally
  after personnel contracts are issued for the
  applicable year.

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Definitions (continued)

• Allocation objects any object (line item)
  between 79901 and 79999. Allocation objects are
  NOT budgeted by the budget manager.
• General Instructional and Operating Expenses
  (GIOE) objects (line items) most objects (line
  items) between 70301 and 71603 and Departmental
  Transfers 79501 through 79514). These line items
  are the items that are fungible when you are
  building your budgets and you may choose any
  object code that best describes your activity.

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Definitions (continued)

• Other line items (objects) - The line items in
  this range of objects that are excluded from GIOE
  include
• Student employees (70134 through 70137)
• Marketing (e.g. postage, advertising, printing,
  publications)
• Property Expense, Utilities, and Insurance and
  Licenses (72001 through 72405)
• Equipment (72601 through 72608)
• Financial Aid (77111 through 77197)
• Other, Mandatory Non Mandatory Transfers
  (78001 through 79001)

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Line Items (Object Codes)

• Any questions on the use of line items (object
  codes) on the handout or how to use them in
  building your budgets?

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Outline of Process and Timeline

• Cheryl Ney and Don Aungst will send out a budget
  instruction memorandum to the VPs which will
  outline the process and establish the dead lines
  for submitting your material. The VPs will
  establish the time line for their division that
  allows them to meet the budget instruction dead
  lines
• Time line

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Outline of Process and Timeline (continued)

• Forms
• Process
• Take whatever budget guidance youve been given
  for fungible General Instructional and Operating
  Expense (GIOE) line items, such as this years
  budget 2, and allocate that total to whichever
  line items you feel are appropriate.
• Any amounts over the budget guideline must be
  requested on a separate form and submitted to
  your vice president. Your vice president will
  consolidate and prioritize all request in excess
  of the guidelines for consideration when
  submitting their budget to the VP of Resource
  Management Office.

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FAQs (Frequently Asked Questions)

• Should I charge expenses to whichever line has
  available budget dollars?
• The primary consideration is that you charge
  expenses to the proper line, regardless of budget
  dollars available. Remember not to go over your
  total budget when charging expenses to lines that
  have no budget.
• Can I split out an invoice to several line items?
• Yes, you can use several line items or even
  several departments, if you have permission from
  those departments.

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FAQs (Continued)

• Do I have to have permission to charge other
  departments on an invoice?
• Just as you would not want a bank to take money
  out of your account without your knowledge,
  budget managers feel the same way. Please get
  permission before charging other departments.
• If my vice president is funding a purchase in my
  department, how should I handle that?
• Do a journal entry that debits the line item in
  your vps department and the offsetting credit is
  to your department, in the appropriate line item.

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FAQs (Continued)

• What is the difference between consultation and
  contract services?
• Generally, a consultation is professional advice,
  where a contract service is generally for a
  continuing contractual obligation. The
  university may hire a consultant for advice on a
  project, where we would sign a contract for the
  annual audit.

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FAQs (Continued)

• Why do we have to budget for capital items as
  well as operating items?
• Capital items are items over a 5,000 limit that
  the university will depreciate over time. We may
  purchase a truck as a capital item and depreciate
  it over several years. Only the amount of the
  depreciation is an expense each year. For
  operating budget items, the entire amount is
  expensed in the year of purchase. Although we
  treat the method of expense differently, we must
  account for both capital and operating items in
  our financial statements.

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FAQs (Continued)

• How do I request a capital improvement or a
  Facilities Management project?
• A request should be made to your Dean or
  Department Head, which they will forward to their
  VP for prioritization. The VP will then forward
  a prioritized list to Fred McKinney in Facilities
  Management.
• When will monthly reports be distributed?
• Our goal is to have all departmental charges in
  by the 10th of the month, allowing distribution
  of prior month reports by the 15th.

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FAQs (Continued)

• What line item should I use to pay stipends?
• Any stipends that are paid to employees must be
  paid from a salary/wage line item. If you pay an
  employee for a stipend, payroll taxes must be
  withheld, so payment must come from the payroll
  office in the form of a paycheck.
• What should I do if I have an expense that
  doesnt fit into an existing line item
  description?
• Continue to use the line item you have
  historically, and you can request the addition of
  a new line. If enough requests are received for
  a new line, it may be added.

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Conclusions

• Development of a three year projected budget will
  help make strategic decisions
• After the initial set up, forecasting will be
  much more accurate and easier to complete

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Questions

• Please contact
• For budget building procedures
• Don Aungst, 6814, daungst_at_capital.edu
• Dave Kosanovic, 6872, dkosanov_at_capital.edu
• For historical or current year data questions
• Paul Miller, 6316, pmiller_at_capital.edu
• Eileen Day, 6514, eday_at_capital.edu

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Recap

• To discuss the definitions, process, and timeline
  for the developing the 2003-04 budget.
• Emphasize that our budgets should be
• a numeric expression of our action plans for the
  year
• adjusted to choose line items (object codes) that
  accurately reflect the transactions that will
  occur
• differentiated between those that are general
  instructional or operational (e.g. Biology or
  Admissions) versus net revenue centers (e.g.
  Community Music School) and
• developed for unrestricted and restricted funds.

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Thank you for your assistance!

• Cheryl Ney
• Don Aungst
• David Kosanovic