Department Head / Chair Training Finance & Operations

AGENDA Division of Finance & Operations Campus Budget Monthly Reporting Contract Processing Procurement Cards Accounts Payable September 21, 2018

Division of Finance and Operations September 21, 2018

F & O Organization Chart Vice Chancellor / CFO Finance Accounting & Budget Accounts Payable / Payroll Bursar & Student Loans Special Projects Sponsored Projects Accounting Business / Operations Business Contracts Police / Parking Purchasing Auxiliaries Mail Services Bookstore Dining Services Printing & Copy Center September 21, 2018

Campus Budget September 21, 2018

Definitions Unrestricted Funds: (E-accounts) Funds provided to meet the primary educational mission of the university (sometimes referred to as Educational & General Funds) Restricted Funds: (R-accounts) Funds provided to meet a designated purpose – research, scholarships, endowed chairs, etc. General Operating Budget: Funding provided across campus to meet operational needs – referred to as ORANGE dollars. Sources are from State Appropriations, Tuition & Fees, and F&A Revenue What’s the difference between Unrestricted and Gen’l Oper Budget?: Unrestricted Funds includes some self-supporting activities like continuing education, conferences and auxiliaries. September 21, 2018

FY 2013 Budget September 21, 2018

General Operating Budget September 21, 2018

General Operating Budget FY 05 FY 06 FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 State Appropriation $113.0 $115.4 $125.7 $134.8 $129.0 $122.7 $117.6 $119.2 $125.4 Tuition & Fees 30.0 34.0 36.9 40.4 44.3 52.1 58.6 68.2 68.6 Facilities & Admin 14.9 14.8 14.3 13.8 12.0 15.7 15.9 14.2 12.7 TOTAL Gen’l Oper $157.9 $164.2 $176.9 $189.0 $185.3 $190.5 $192.1 $201.6 $206.7 F & A T & F Gains in State funding in FY 07 and FY 08 have been lost and replaced in part by tuition and enrollment increases. State September 21, 2018

Total Budget September 21, 2018

Total Revenue General Operating $157.9 $164.2 $176.9 $189.0 $185.3 FY 05 FY 06 FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 General Operating $157.9 $164.2 $176.9 $189.0 $185.3 $190.5 $192.1 $201.6 $206.7 Gifts & Endow Income 18.1 27.1 18.2 21.2 23.1 18.7 17.9 18.9 18.4 Sponsored Programs 137.8 145.6 143.5 150.3 153.6 156.1 176.4 185.0 180.5 Sales & Service 36.8 32.6 31.9 32.0 34.9 23.6 25.1 28.0 TOTAL Budget $350.6 $369.5 $370.5 $393.1 $394.1 $400.2 $410.0 $430.6 $433.6 Sales & Svc Spon Prog Gifts Gen’l Oper September 21, 2018

Expenditures by College / Division FY 2012 FINAL Unrestricted Funds Restricted Funds TOTAL ALL FUNDS Colleges Allied Health 7,301,426 406,753 7,708,179 Dentistry 17,549,022 2,008,883 19,557,905 Graduate Health Sciences 1,366,325 136,914 1,503,239 Medicine   Memphis 55,080,807 127,941,966 183,022,773 Chattanooga 2,718,648 25,912,026 28,630,674 Knoxville 13,015,448 37,379,528 50,394,976 Nursing 4,636,172 2,179,818 6,815,990 Pharmacy 14,017,823 8,036,184 22,054,007 Administration Chancellor's Office 948,102 308,378 1,256,480 Chief of Staff 5,270,341 25,378 5,295,719 Academic, Faculty, & Student Affairs 11,207,513 1,497,062 12,704,575 Development & Alumni Affairs 3,063,719 Facilities & Utilities 20,989,296 Finance & Operations 8,055,342 Information Tech Services 5,516,719 127 5,516,846 Research 4,300,854 682,352 4,983,206 Campus General 40,550,550 TOTAL HSC 215,588,107 206,515,370 422,103,477 September 21, 2018

FY 2012 All Funds Expenditures September 21, 2018

Monthly Reporting September 21, 2018

Old Report  4 Page Summary September 21, 2018

September 21, 2018

New Report  1 Page Summary September 21, 2018

September 21, 2018

Contract Processing September 21, 2018

What is a contract? Technically, a contract is a specific proposal to enter in an arrangement between two or more parties. Verbal or written There must be some consideration (something of value) to one exchanged for performance by the other . Dollar value does not matter: receivables, zero-dollar, and payable contracts are all processed the same way and only authorized officials can sign them. Title of document does NOT matter: All of these are contracts: Memorandum of Understanding / MOU Agreement or Letter of Agreement Lease September 21, 2018

Contracts When does UT policy require a contract (or PO) in order for an invoice to be paid? When a transaction is valued at $5,000.00 or more. When does UT policy require a contract go to through the formal review process? Every single contract regardless of dollar value. Even if the vendor requires that a contract be signed for a transaction less then $5,000 or receivable to UT or for no cost. September 21, 2018

Dollar Thresholds $5,000 or more requires an NCJ* or Bid NCJ: Non-Competitive Justification – explains why can’t you go out for bid. $100,000 or more  non-delegated for campus signature $250,000 and longer than one year  requires State Fiscal Review Committee approval in most circumstances September 21, 2018

Four Most Important Rules Only authorized officials can sign contracts! For the HSC, the Chancellor, Executive Vice Chancellor and Vice Chancellor for Finance All business contracts must go through our Business Contract Office. Research agreements go through Research Admin. Departments are responsible for reviewing contracts for business terms (prices, etc.), and operational/technical specifications. Departments should not negotiate legal terms and conditions with the vendor. September 21, 2018

Major Prohibited Provisions The University cannot accept the following: Requirements for arbitration or mediation Obligations to pay legal fees, court costs, audit fees, etc. Governing law other than Tennessee Indemnity or hold harmless clauses Limitations of liability or payment of punitive damages University employees as a party to the contract September 21, 2018

Procurement Cards September 21, 2018

Procurement Cards Established to allow for a more cost efficient alternative to make purchases under $5000. Using the procurement card allows for a quicker, more efficient purchasing process Therefore a quicker receipt of needed goods and Quicker payment to vendors. University Policy FI0530 has an extensive listing of those items that are considered inappropriate. The HSC has about 150 cards that are issued through the Bank of America. September 21, 2018

Procurement Cards – Frequently Asked Questions Can we make purchases from Amazon and use the Pcard?? Yes, as long as we don’t provide any of our bank information. Sometimes vendors will ask that you guarantee purchases by “tying” a bank account to them.  We do not allow this.  (Paypal, for instance, will allow certain types of upgraded transactions if the buyer does this.) If we make on line purchases (from Amazon or other vendors) how do we avoid paying sales tax?? When going through the check-out process, you will need to remove the sales tax or see if there is a box to check to show exempt. (each vendor will be different).  Unless it has changed, Amazon will not start adding sales tax until 2014. September 21, 2018

Pro Cards FAQs Are we exempt from paying sales tax in other states or just Tennessee?? Some states offer exemptions.  Please see the Comptrollers Office website for a list. (http://controller.tennessee.edu/ Left hand side – click TAX)  Is it possible address the concerns of BrainBits, NEB, Antibodies Inc, and World Precision Instruments? Can something be worked out with Research Diets Inc, they don’t accept POs.  Also maybe autoship is a possibility? Absolutely. We will get Laboratory Animal Care and Purchasing together to review and find a solution. September 21, 2018

Pro Card FAQs Would it be possible to receive multiple cards with the same account number?  That would resolve some late night or weekend purchase issues. Yes, as long as the cards were in different individual’s names. Yes, there is still a primary holder who would be responsible for the card, as well as a verifier and approver who would be associated with each card. If this staff person leaves my lab, it is my understanding that Finance will no longer approve procurement cards for anyone else in my lab. No, this is not true. We will assign a card to another appropriate staff person. September 21, 2018

Accounts Payable September 21, 2018

Equipment Inventory Threshold: $1,500 for sensitive minor equipment (i.e., computers) Other equipment is recorded at $5,000 or greater We are currently in the process of reviewing the annual equipment inventory. Each year, Departments must go through and physically observe the equipment listed on their inventory sheets. For missing or surplus equipment, there are steps that must be followed to complete appropriate notifications. Failure by the department to complete the process in a timely manner can cause problems for the University during our audits. September 21, 2018

Travel In processing these payments, we are required to audit the travel expense report as filed by the traveler / department. If problems are found, we assist the department to correct those problems so that we can pay those reimbursements. Unless there is a serious problem with the expense report, we have a goal of five business days to request payment, but currently we are typically able to accomplish this in three business days. FYI, we process over 4000 travel reimbursements a year. September 21, 2018

Seminars / Conferences We register employees to attend these events and email the participant with the related information about payment for the event. We have a special procurement card for this purpose – Departments cannot use their pro card for registrations. Doing so, we are generally able to get a refund if the attendee has to cancel after the deadline whereas the participant often cannot. The Department makes all of the other arrangements. September 21, 2018

Capital Funding September 21, 2018

Capital Funding Process The State of Tennessee provides capital funding in three categories: Capital Outlay Major capital projects Primarily new construction or major renovations to existing facilities Funded primarily from State General Obligation Funds Capital Maintenance Major projects from reconstruction to rehabilitation and renovation Significant renovations, repairs, or improvements to existing facilities Institutionally Funded Major projects, including new construction funded by the campus through revenue generating bonds or major gifts. September 21, 2018

Capital Project Funding GEB / Simulation Ctr = $24.1 mill Building Demo = $4.0 mill September 21, 2018