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Sport Budgeting 101

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Chief Budget Officer at mid-size, 4-year public institution in the Midwest. ... Overseeing agency serves as 'bank' Bottom-line oriented. Account is very flexible ... – PowerPoint PPT presentation

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Title: Sport Budgeting 101


1
Sport Budgeting 101
2
Class Outline
  • Introduction
  • Budget Terms
  • Budgeting Processes
  • Types of Accounts
  • Comprehension/Monitoring
  • Creating a budget
  • Question and Answer

3
Learning Objectives
  • The participant will
  • Be able to understand basic budgeting terms by
    matching terms and definitions on a worksheet
  • Become more knowledgeable about analyzing budget
    reports by identifying mistakes and
    inconsistencies on a sample budget report
  • Gain a better understanding of the differences
    between an auxiliary account, an agency account,
    and a university account by correctly identifying
    the differences between the three
  • Gain greater comprehension of the budgeting
    process by creating a sample auxiliary budget.

4
Budgets
  • Working Definition
  • -a plan detailing how a department
  • proposes to secure and utilize financial
  • resources over a specified time period
  • -a financial plan that serves as an estimate
    of future cost, revenues, or both
  • Of course

5
Another Definition
  • Your budget is not really a budget, its more
    like a guideline for spending.
  • -Chief Budget Officer at mid-size, 4-year public
    institution in the Midwest.

6
Purpose of Budgeting
  • Plan
  • Its strategic (and required)
  • Keep spending in line
  • Fast track on revenue
  • Goal-oriented

7
Some Things You Should (Probably) Know About Your
Budget
  • How much do you know about your (departments)
    budget and the institutions spending parameters?
  • Lets find out

8
Budget Terminology
  • How conversant are you
  • in budget
  • Terminology?
  • Lets find out

9
Budgeting Terms
  • Revenue Variance
  • Deferred Income Expense
  • Supplies Reserve
  • Fund Balance Cost Center
  • Expense Reimbursements Encumbrance
  • Debt Retirement Revision
  • Equipment
  • Appendix B

10
Budget Development Processes
  • Incremental
  • Zero-based
  • Performance
  • Formula
  • Seat-of-the pants

11
Types of Accounts
  • Unrestricted EG (university only)
  • Auxiliary
  • Agency
  • Plant
  • Foundation

12
Unrestricted E G
  • Most departments
  • Funding comes from E G
  • Bottom-line oriented
  • Little built-in flexibility
  • Positive fund balance?
  • Advantages

13
Auxiliary
  • Few departments
  • Funding from multiple sources
  • Bottom-line less an issue
  • Much flexibility
  • Positive fund balance?
  • Advantages

14
Agency Account
  • Controlled by a department/division
  • Overseeing agency serves as bank
  • Bottom-line oriented
  • Account is very flexible
  • Positive fund balance?
  • Advantages

15
Plant Account (Fund)
  • Controlled by a department/division
  • Funding from multiple sources
  • Bottom-line oriented
  • Flexibility is variable
  • Positive fund balance?
  • Advantages

16
Foundation
  • Controlled by department/division
  • Funding is through fund-raising
  • Bottom-line flexibility
  • Much flexibility with unrestricted funds
  • Positive fund balance?
  • Advantages

17
Comprehension
  • Types of budgets/accounts quiz

18
Comprehension (The Sequel)
  • Variance
  • The difference between _________
  • amounts and _________ amounts.
  • Demonstration of Knowledge, Appendix E (its
    unlabeled)

19
Budget Monitoring
  • Checking budget reports for accuracy
  • Importance
  • Common Errors
  • Finding Mistakes

20
Common Errors
  • Spreadsheet formula errors
  • Transposed data
  • Data entry errors

21
Finding Mistakes
  • Good accountant or business manager
  • Watch for unusual monthly variances
  • Column total vs. Row totals in reports

22
Locate Spreadsheet Formula Error
  • FY 2004 Revenues
  • Through May 31, 2004
  • Budgeted Actual YTD of
  • Total
  • Fee Income 3,948,000 3,948,000 100.0
  • Non-Fee Income
  • Sales 224,447 216,879 96.6
  • Membership 702,341 710,993 101.2
  • Programming 257,790 256,872 99.6
  • Total Non-fee Income 1,184,578 1,184,744 100.0
  • Total Revenue 5,132,578 5,132,744 98.7

23
Circle Possible Errors
Line Area July Aug. Sept. Oct. Total
1600 Students 1,100 1,250 1,400 130 3,750
4000 Supplies 1,000 8,500 500 0 10,000
5100 Telephone 1,234 1,234 1,234 1,243 3,702
5200 Postage 125 200 240 190 565
6000 Travel 400 0 300 1,200 700
Total 3,859 11,184 3,674 2,763 18,717
24
Corrected
Line Area July Aug. Sept. Oct. Total
1600 Employees
4000 Supplies
5100 Telephone
5200 Postage
6000 Travel
Total
  • 1,100 1,250 1,400 130
    3,880
  • 1,000 8,500 500 0
    10,000
  • 1,234 1,234 1,234 1,234
    4,936
  • 200 240 190
    755
  • 0 300 1,200
    1,900
  • 3,859 11,184 3,674 2,754
    21,471

25
Creating a Sample Auxiliary Budget
  • Take FY 2004, and create FY 2005
  • Assumptions

26
References
  • Kent State University Policy Register. (2004).
  • Carviters Orwig. (1982). Evolution of modern
    budgeting. NACUBO Journal, 24-59.
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