1 Financial Review Non-Sponsored Awards

Guiding Principles Review Financial Situation Periodically Timely correction of errors and omissions Accurately project future financial results Minimize transactions during year-end close Maximize use of restricted funding 2

Timely Correction of Errors and Omissions Standard timeline for corrections is 90 days Helps prevent future errors and charges for clearing org suspense Documentation is easier to locate 3

Components of the Review Expenditure Statement Review –Organization Suspense Account –AP Default Account Operating Budget Reconciliation and Variance Fund Overdrafts Cost Sharing 4

Expenditure Statement Review Review should be done monthly Make sure salaries are correctly distributed - check the Organization Suspense account For missing non-salary expenses, check the AP Default account Use the Financial Management Services resources at: 5

1 st Quarter Review 6

Operating Budget Reconciliation 1 st Quarter Review Check that the expenditure budget is accurately posted as Expense Control on the Oracle ReportMart3 179 or 285 expenditure reports in September Check that Dean’s Office and departmental operating budget funding are accurately posted on the Oracle ReportMart3 153 Fund Statement in October (Tip – Use the data download to see the project, award, and org offsets on transfers) 7

Expenditure Reconciliation 1 st Quarter Review Reconcile the final Operating Budget “Budget Summary” Expense section and the Oracle Expenditure Statement “Expense Control” for September by account and expenditure type 8

Sample “Budget Summary” 1 st Quarter Review 9

Funding Reconciliation 1 st Quarter Review Reconcile the final Operating Budget “Budget Summary” Funding section and the Oracle operating budget Fund Statement for October 10

Funding Reconciliation 1 st Quarter Review Dean’s Office Allocations o General Funds o Other Dean’s Office Funds o One-time Commitments Department/Program funding President and Provost Office funding is usually transferred later and not included in the 9/1 budget 11

Sample “Base Funding Allocation” 1 st Quarter Review 12

Sample “9/1 Funding Commitments” 1 st Quarter Review 13

Funding Reconciliation 1 st Quarter Review There are several ways to validate that expense control equals funding Run the Fin Fund 253 YTD Award Status report in ReportMart3 or use FFIT If your funding by project does not equal your expense control: –The Fin Fund 153 Fund Statement Report is the best source for detailed funding entries 14

Funding Reconciliation - FFIT 1 st Quarter Review Log-in to FFIT (ffit.stanford.edu) Select the Organizational Accounts tab Drill down on your Operating Budget Award 15

Funding Reconciliation - FFIT 1 st Quarter Review Compare Transfers to the Expense Control/Budget for each OB Project This reconciliation can be done on-line or Download to Excel 16

Funding Reconciliation - FFIT 1 st Quarter Review Compare Transfers to the Expense Control/Budget for each OB Project 17

Mid-Year Review 18

Mid-Year Variance Operating Budget Mid-Year Review Check any mid-year commitment funding on the Oracle Fund Statement for February month-end Determine if expenditure rate is as expected on February reports Project year-end position 19

Mid-Year Operating Budget Funding Mid-Year Review 09/01 Funding From Operating Budget – Budget Summary Page and Fund Statement (153) for OB Award + Mid-Year Commitments you’ve already received From February YTD Fund Statements + Other transfers in or (out) From February YTD Fund Statements = Total OB Funding year-to-date 20

Mid-Year Operating Budget Variance Mid-Year Review Six month expenditure variance is based on February statements Some expenditures are primarily for the academic year October – June Most expenses in Operations are consistent throughout the fiscal year Check patterns from previous year(s) 21

Components of the Review Mid-Year Review Expenditure Statement Review –Organization Suspense Account –AP Default Account Operating Budget Reconciliation and Variance Fund Overdrafts Cost Sharing 22

154a Fund Statement Summary Mid-Year Review 23

Possible Causes of Overdrafts Mid-Year Review Too much funding transferred to support Operating Budget Dean’s Office or President’s Office funding transfers have not yet been made Incorrect expenses or too many expenditures charged to a faculty-controlled fund 24

Corrective Actions Mid-Year Review Move incorrect or excess expenditures using iJournals or Labor Distribution Adjustments monthly Pull back Operating Budget support – send request to Finance liaison as soon as possible (be sure you use the 154a report to include anticipated payout) Transfer funding from a “like” fund to the fund in overdraft Note anticipated funding not yet posted 25

Allowable Fund Transfers 26

Commitments and Fund Overdrafts Mid-Year Review Annotate your Commitments Report and return to your liaison for any commitments that you need to provide actual amounts or other information Complete the first pass to cover fund overdrafts by annotating the 154a report with anticipated funding or corrective action If a transfer to the operating budget causes an overdraft in an endowment fund and the anticipated payout will not cover it, you can ask your liaison to pull back enough funding to clear the overdraft - you do not have to wait until year-end 27

Overdraft Coverage – 154 Mid-Year Review 28

Year-End Review 29

Reconciling Operating Budgets at Year-End Year-End Review 30 09/01 Funding From Budget Template – Budget Summary Page and Fund Statement + Mid-Year Commitments you’ve already received From August fund statements + Mid-Year Commitments you haven’t received yet + Other transfers in or (out) From August commitments reports From August fund statements = Total OB Funding for the year

Sample “Year End Close Report” Year-End Review 31

Operating Budget Funding Year-End Review The Fin Fund 153 Fund Statement Report is the best source for detailed funding entries During fiscal year-end close we match funding by project to expense by project - we are no longer concerned with expense control 32

Other Sources for OB Funding Year-End Review Budget Planning System – Budget Summary Dean’s Office Allocation Departmental funding in the green section Commitments Report Mid-year commitments to the operating budget 33

Operating Budget Funding Year-End Review If not already completed in the 1 st Quarter, reconcile Budget to Fund Statement –Operating Budget “Budget Summary” page This should equal the OCT GF transfer on your fund statement by project (use data download to get source PTA data) There are separate OCT lines for department controlled funding transfers Dean’s Office reconciles the Faculty Salary project Reconcile mid-year transfers on Fund Statement Additional fund transfers during the year for mid-year funding commitments or transfers to/from other PTAs 34

Year-End Report for OB Year-End Review Actions you should be taking: –Review Year End Report for your OB Award to check funding and expense –Use the Fin Exp 279 Transaction Detail to check any questions about expenditure details - reports are updated daily –Add any outstanding year-end commitments from your commitments report to project year- end funding 35

Help with Reconciliation Year-End Review If you’re having trouble reconciling your expenditures, take a look at the Financial Management Services website: 36

Complete YE Close Instructions Year-End Review By the end of the day on the last workday of August: –Complete instructions on your 154 report for covering overdrafts –Complete instructions on the Year End Report sent by your liaison for the operating budget Give instructions for pulling back unused restricted funding, moving general funds allocations, or adding funding as needed You can keep it simple, or make it complex, add rows and columns as needed to make it clear (Since reports are updated daily, you should be able to project your year-end balances closely) 37

Adjustments to OB Support Year-End Review 38

Operating Budget Instructions Year-End Review 39

Complete Revised Instructions Year-End Review After August closes, revise instructions if necessary –Complete instructions on your most recent 154 report for covering any remaining overdrafts –Complete revised instructions on the Year End Report if there are material differences from original instructions 40

Budget Savings Year-End Review Surpluses in graduate aid will be moved to the Grad Aid Savings account Surpluses in non-base budgets should be cleared by pulling back funds to the original source Budget savings decisions for operations projects are made by Jim Henry and Steve Olson based on the YE template and department/program reserves 41

Cost Sharing Entries in August Year-End Review Cost sharing for faculty salaries and benefits during the academic year should be covered before August Month-End (Soft) Close - please work with your liaison Other cost sharing expenses should be covered from an appropriate departmental source – liaisons will make transfers based on your instructions 42

Financial Review for Non- Sponsored Awards 43 Questions or Suggestions?