Managing a Budget Conducted by the Budget Office Corbin deNagy – Budget Analyst

General Ledger Concepts GL: Where accounting transactions are recorded, contains actual (non-budgetary) financial information GL Accounts: Classify balances on the GL Examples: 112000 – Cash in Bank 600501 – Investment Earnings-Interest 741101 – Supplies Office GL Journal Entries: Record accounting transactions, must be in balance (Debits = Credits)

General Ledger Concepts GL Account Type OMNI Accounts GL Account Examples Increase Decrease Assets 1XXXXX 2XXXXX Cash, Receivables Debit Credit Liabilities 3XXXXX 4XXXXX Accounts Payable Revenues 6XXXXX Interest Income Expenses 7XXXXX Salaries, Office Supplies Examples: When a voucher is keyed Debit Expense $500 Credit Payable ($500) When the payment is made Debit Payable $500 Credit Cash ($500)

Commitment Control Concepts Budgetary Accounts: Classify balances on KK Examples: 690500 – Budget Interest Earnings 710000 – Budget Salary Wages 740000 – Budget Expense Budget Journals & Budget Transfers: Record transactions to KK budget ledgers Journals are used to increase or reduce budget Transfers are used to transfer budget

Commitment Control Concepts KK Ledger Groups & KK Ledgers: Where budgetary transactions are recorded Examples: KK Ledger Group KK Ledger CC_EXP_GRP For non-project expense budgets CC_BUD – Expense Budget CC_ENC – Encumbrances CC_EXP – Expense CC_REV_GRP For non-project revenue budgets CC_REV_BUD – Revenue Budget CC_REV_REC – Revenue Recognized CC_REV_COL – Revenue Collected

GL & KK: What posts to each? Transaction GL KK GL Journal Entries Everything Lines including cash, receivables, payables, revenues, expenses, etc. all post to the GL. Some things Only lines including non- property revenues and non-property expenses post to KK. Budget Journals & Budget Transfers Nothing GL Journal Entries are the only financial transactions that post to the GL. Lines updating budget balances post to the appropriate KK budget ledgers. Other – Purchase Orders, Travel Authorizations, etc. Encumbrances are established when purchase orders or travel authorizations are issued.

OMNI Organizational Structure In OMNI: Departments roll up to Areas Areas roll up to Schools/Colleges* Schools/Colleges roll up to Divisions Examples: *Note: OMNI Schools/Colleges are not always academic! Department Area School/College Division 008012 Women's Track Women's Athletics Athletics Central Administration 042002 Utilities Electricity Utilities AVP Facilities Finance & Administration 087001 FL Climate Center Meteorology College of Arts & Sciences Academic Affairs 187016 Jazz Education College of Music

What is a Budget Entity? Budget Entity is a classification used to define resources. In short, it indicates funding sources. Funding sources may be: Appropriated – Set aside by the State Legislature for specific purposes Non-Appropriated At FSU, budget entities correspond to OMNI Fund numbers.

Education and General (E&G) OMNI funds 1XX (non-College of Medicine) and 2XX (College of Medicine). Appropriated by the State Legislature. Includes General Revenue (primarily Florida’s sales tax), Student Tuition and Fees, and Lottery. Spending must result in a direct, specific benefit to the University.

E&G: Tuition Differential OMNI funds 121 and 126 Established in 2008-09. Funds are allocated by the Provost. F.S. 1009.24, “the revenues from the tuition differential shall be expended for purposes of undergraduate education.”

Non-E&G: Auxiliary OMNI funds 3XX Primarily sales to University departments, students, faculty, staff, and others. Student Housing, food services, bookstores, student health centers, transportation and parking services, facilities management and computer support are among the major services provided. Spending from an auxiliary should be consistent with its mission/purpose. Note: Surplus revenues from Market Rate Tuition auxiliaries (OMNI fund 325) may be used in support of non-auxiliary activities, but must follow E&G/auxiliary spending guidelines.

Non-E&G: Contracts and Grants OMNI funds 520-570 From contracts and grants related to sponsored research. Spending must comply with all university and agency requirements, and must follow the terms of the contract/grant. Budget Office policies and procedures cover everything except sponsored research activities under the purview of SRAS.

Non-E&G: Student Activities OMNI fund 610 Primarily the Activity and Service (A&S) fee, along with some self-generated revenues from the FSU Flying High Circus, the Ogelsby Union, etc. A&S fee revenues are allocated by SGA and should be spent to benefit the student body in general.

Non-E&G: Technology Fee OMNI fund 615 From the technology fee paid by students. Funding is distributed in three ways: (1) one-third to the colleges based on an allocation model that uses each college’s most recent total student credit hours; (2) one-third to the central IT organizations based on a similar model; (3) most or all of the final one-third to faculty or staff projects that enhance instructional technology.

Non-E&G: Vending OMNI fund 620 Commissions from vending machines (over 250 on campus!). Funds are allocated from the President to the VPs and then to the colleges/departments.

Designations Identifying DDDHC, Budget Manager, Authorized Signer(s) To look up single departments: Financials Main Menu Set Up Financials/Supply Chain Common Definitions Design Chartfields Define Values Chartfield Values Add to Favorites! Department To look up multiple departments: Reporting Tools Query Query Viewer FSU_DPT_AUTHORIZED_SIGNERS

A Few Notes: Designations Authorized Signers – those designated to approve transactions. DDDHC – typically delegates budgetary responsibility, but holds ultimate responsibility for the fiscal soundness of a department. Designations can be updated using the Update Existing Department ID Form (located on the Budget Office website).

Budget Manager Responsibilities Serves as the official contact for the department on financial matters. Ensures that departmental ledgers are reconciled to supporting documents. Identifies and corrects invalid department-fund combinations. For Non-E&G, enter operating budgets. Completes and submits required documentation. Maintains departmental available and cash balances.

A Few Notes: Designations Budget Office policies and procedures cover everything except sponsored research activities under the purview of SRAS. Our office focuses on DDDHCs, Budget Managers and Authorized Signers, SRAS focuses on project personnel. Updates may need to be made through SRS along with Chartfield Values. http://www.research.fsu.edu/contractsgrants/forms.html

Budget Errors Budget Errors prevent financial transactions from posting. Budget Error To Correct Budget is Closed Sponsored Research Only: Contact SRAS All Others: Contact the Budget Office Exceeds Budget Tolerance (The transaction did not pass E&G “Budget Checking”) Follow procedures to increase E&G Available Balance No Budget Exists (The department-fund-account combination has not been activated in OMNI) E&G Only: If possible, perform a Budget Transfer to add budget to the combination Anyone: Contact the Budget Office to request a Zero Budget Journal

Spending Constraints Budget Entities are constrained by either: Cash When a Budget Entity is constrained by budget, “Budget Checking” in OMNI will prevent transaction from being processed without sufficient funds. When a Budget Entity is constrained by cash, departments may spend into a cash deficit, as there is no “Cash Checking” in OMNI.

Spending Constraints Which Budget Entities are constrained by budget? All E&G funds (1XX-2XX) Which Budget Entities are constrained by cash? All Non-E&G funds (3XX, 610, 615, etc.) Why are E&G funds constrained by budget and not cash?

Spending Constraints What does this mean for the Budget Manager? When spending is constrained by budget, departments should monitor Available Balance. When spending is constrained by cash, departments should monitor Departmental Cash Balance Before we delve into this more, let’s recap.

Recap: FSU Budget Entities Budget Entity OMNI Fund(s) State Appropriated Spending Constraint Education & General (E&G) 1XX Yes Budget E&G-College of Medicine 2XX Auxiliary 3XX No Cash Student Activities 610 Technology Fee Trust Fund 615 Vending 620 Athletics 630

Available Balance Available Balance = Budget-Encumbrances- Expenses There are a few ways to check available balance: Budgets Overview Budget Detail OBI Available Balance The first two ways are “live” while OBI uses data as of close of business the night before.

Available Balance: Budgets Overview OMNI Financials Main Menu Commitment Control Review Budget Activities Budgets Overview Add a New Value tab Enter BUD OVER Add Ledger Group: CC_EXP_GRP Save

Available Balance: Budgets Overview Let’s try an example: Enter 004% in the Dept field Click Search What information do we have? What information can we ignore?

Available Balance: Budget Detail OMNI Financials Main Menu Commitment Control Review Budget Activities Budget Details Ledger Group: CC_EXP_GRP

Available Balance: Budget Detail Let’s try an example: Ledger Group: CC_EXP_GRP Enter 004% in the Department field Budget Period: 2013 Click Search What information do we have? What information can we ignore?

Available Balance: OBI Available Balance myFSU BI Dashboards Financial Reports – Available Balance Notice the date and time beneath the headers – if you are providing data from OBI, be sure to note that the data does not include the current day’s transactions

Available Balance: OBI Available Balance Let’s try an example: Click the drop-down arrow for Department Click Search… Enter 004 in the Name field Click Search Click the double arrows to “Move All” Click OK Click Apply Unlike the other options, OBI Available Balance will not show carryforward funds next to current-year funds. To view carryforward funds, change the Report Categories to E & G – FSU – CARRY FORWARD

Negative Available Balance You discover that one of your departments has a negative available balance; what do you do? You could do one or both of the following: Transfer budget between departments and/or accounts Budget cannot be transferred between different E&G funds Salary conversions must be processed by the Budget Office Transfer expenses between departments and/or funds Maintain reporting integrity (e.g., E&G expenses that belong on E&G should not be transferred to an Auxiliary) Payroll transfers must be processed by Payroll Accounting

Budget Transfer The Budget Manager designation does not give an employee the proper security to process budget transfers in OMNI. Any user (Budget Manager or not) may request the Budget Transfer Role via the eORR link. The FSU Budget Transfer Role Request form (available on the Budget Office website) must also be submitted to the Budget Office.

Budget Transfer In general, budget may be transferred: Within a department, between budgetary accounts (046000-110-720000 to 046000-110-740000) Between departments, within a budgetary account (046000-110-720000 to 001000-110-720000) Between departments and budgetary accounts (046000-110-720000 to 001000-110-740000) Budget cannot be transferred between funds (i.e.,110 to 140). Why? All E&G budget transfers involving Salary (710000) must be coordinated through the Budget Office. Visit the Budget Office website for detailed job aids.

Negative Available Balance Let’s try an example: What could we do to correct this negative available balance? Department Fund Account Budget Encumbrances Expenses Available Balance 046000 110 740000 $20,000 $5,000 $17,000 $(2,000) 710000 $1,000 $3,000 140 700001 $15,000 $6,000 046001 $10,000 $2,000 046002 320 $30,000 $8,000

Quick Point: Negative Available Balance How often should a Budget Manager monitor their available balance? Answer: At least weekly. The Budget Office runs queries at the end of every month and emails Budget Managers whose departments have an aggregate (non-Salary Budgetary Accounts) negative available balance.

Departmental Cash Balance OMNI Financials Main Menu Reporting Tools Query Query Viewer Query Name: FSU_DPT_CASH_BALANCE Click Favorite under “Add to Favorites”

Departmental Cash Balance Let’s try an example: Click HTML under “Run to HTML” Business Unit: FSU01 Non E-G Fund w wildcard %: 330 Dept ID w/ wildcard %: 046001 As of Jrnl Date: t Click View Results

Negative Cash Balance You discover that one of your departments has a negative cash balance; what do you do? You could do one or both of the following: Transfer cash between departments and/or funds E&G cash cannot be transferred to Non-E&G, and Vending cash cannot be transferred to a Non-Vending fund Maintain reporting integrity (e.g., cash that truly belongs on Student Activities should not be transferred to cover an Auxiliary cash deficit) Transfer expenses between departments and/or funds Maintain reporting integrity (e.g., Auxiliary expenses that belong on an Auxiliary should not be transferred to E&G) Payroll transfers must be processed by Payroll Accounting

Quick Point: Negative Cash Balance How often should a Budget Manager monitor their cash balance? Answer: Like available balance, at least weekly. The Budget Office runs queries at the end of every month and emails Budget Managers whose departments have a cash deficit.

Treatment of Funds at Year End What funds do you get to keep? Type of Budget Entity Funds Funds Kept by Department E&G OPS Expense OCO Special Categories Carryforward June 30th Encumbered Balance + Available Balance Salary $0-Excess funds are swept to the University Central Reserve Non-E&G Cash June 30th Fund Balance

Treatment of Funds at Year End E&G Example At June 30th, your balances are: How much would your July 1st carryforward budget be? Budgetary Account Budget Encumbrances Expense Available Balance Salary $300,000 $5,000 $283,000 $12,000 $40,000 $2,000 $16,000 $22,000 Carryforward $10,000 $1,000 $8,000

Rate vs. Salary Rate: the annualized pay attached to a position (doesn’t include fringe benefits) Salary: Rate plus fringe benefits Example: An employee’s Rate, or annual pay, is $30,000. The University pays an additional $8,400 for the employee’s health insurance, retirement, etc. The Salary budget for the employee is $38,400.

E&G Salary Budgets For the Operating Budget, the Budget Office calculates E&G Salary budgets by department, then books the budgets in OMNI. The Budget Office then manages E&G Salary throughout the fiscal year using a process called Rate Allocation, keeping control totals of Rate. For this reason, any Rate changes must go through the Budget Office.

E&G Salary Budgets Unlike Rate, Salary budget is not generally adjusted during the fiscal year. Exception: In some cases, unused budget for Faculty (excluding benefits) may be converted to OPS, Expense, or OCO. These conversions must be processed by the Budget Office. Because the Budget Office manages E&G Salary, Budget Managers do not need to monitor E&G Salary budget or available balance. They do need to ensure that employees are paid correct amounts on the proper department-fund combinations.

Non-E&G Salary Budgets For the Operating Budget, the Budget Office generates Non-E&G Position Reports to show estimated Salary expenditures by department. These reports are sent to Budget Managers, and the Salary Estimates are displayed on the Non-E&G Budget Request screen in OMNI. Budget Managers may use these estimates to develop their Salary budget requests.

Non-E&G Salary Budgets Once Operating Budget requests are approved and booked in OMNI, Non-E&G budgets are not generally adjusted. Like E&G, Non-E&G Budget Managers do not need to monitor Salary budget or available balance. They should, however: Monitor their Departmental Cash Balance Ensure that employees are paid correct amounts on the proper department-fund combinations

Budget Office Reports For E&G, three reports are periodically created and distributed to OMNI Schools/Colleges: Allocation Reports (separate Faculty & Support Staff) Position Reports (separate Faculty & Support Staff) Support Staff Rate Pool Reconciliations (which reconcile Allocation Reports to Position Reports) Non-E&G Position Reports are created and distributed to Budget Managers: Around June of each year for use in developing budgets As requested

More Rate & Salary Information Visit the Budget Office website for more on: Rate & Salary Fringe Benefits In-Unit & Out-of-Unit Classifications http://www.budget.fsu.edu/Positions-Rate

Frequently Asked Questions Can we have more than one Budget Manager? Answer: OMNI only allows for one person to be listed. Our department is starting a new auxiliary; can we use our main department ID (which is an E&G department)? Answer: The purpose and corresponding coding of the department ID determines what Budget Entity can be used. Typically, a department ID can only be associated with one Budget Entity. For this question, the auxiliary would need to have it’s own department ID. Exceptions

Frequently Asked Questions Can we delete or inactivate an unused department ID? Answer: At this time, we are unable to inactivate department IDs. We cannot delete department IDs because we must retain historical records. If we can’t delete or inactivate an unused department, why do we need to maintain department designations (DDDHC, Budget Manager)? Answer: Designations must be maintained in case erroneous transactions hit the department. If this happens, we will know who to contact (remember – the Budget Manager is the official contact for the department).

Essential Websites Budget Office: http://www.budget.fsu.edu/ Important Announcements Budget Office Staff Financial Reports & Data Auxiliary Information and Forms Positions & Rate Information and Forms FSU Department ID Form Budget Manager Responsibilities Job Aids Frequently Asked Questions and a Glossary of Terms Controller’s Office: http://control.vpfa.fsu.edu/

Essential Websites Enterprise Resource Planning (ERP): http://www.erp.fsu.edu/ Human Resources: http://hr.fsu.edu/ OMNI Training: http://omni.training.fsu.edu/ Purchasing Services: http://purchasing.fsu.edu/ Sponsored Research Accounting Services (SRAS): http://www.research.fsu.edu/sras/

Classroom Training Courses Budget Office Courses BTBUD1 – Managing a Budget BTBUD2 – Introduction to Auxiliaries BTBUD3 – Auxiliary Rate Calculation Visit http://www.hr.fsu.edu/train/ for: Course Schedules Registration Instructions

The End! Thank you for attending! Questions or comments? Please complete a course evaluation! Corbin deNagy 645-0050 cdenagy@admin.fsu.edu