Understanding Your Budget

1
Understanding Your Budget

• January 2008

Dr. Amy Ballagh Assistant to the Vice President
for Student Affairs Enrollment
Management aballagh_at_georgiasouthern.edu
2
Todays Topics

• Fund sources restrictions
• Budget development
• Transferring funds
• Salaries
• Travel purchasing regulations
• Audits

3
Financial Fandango
Demonstrate your financial wizardry!

• Lifelines
• Eliminate an answer
• Call on a colleague
• Poll the audience

4
A staff member in your department is having a
baby. Which funds are the best to use to pay for
the gift from the department?

• A. Student Activity

B. EG
C. Foundation
D. University funds cannot be used
5
FUND SOURCES RESTRICTIONS
6
Types of Funds in SAEM

• EG
• Student Activity
• Foundation
• Agency
• Federal
• Auxiliary (Health Services Housing only)

7
Education General (EG) Funds

• Consist of state appropriations, tuition
  mandatory fees
• No fun, food or flowers
• Ideal for labor costs, travel, office supplies,
  office-related expenses, equipment
• Use it or lose it

8
Student Activity Funds

• Activity Fee RAC Fee paid by student enrolled
  in 4 credit hours
• Funds from Activity Fee distributed by Activity
  Budget Committee proposal required each year
• Funds from RAC Fee used by CRI
• For social, cultural, recreational educational
  opportunities for GSU students
• Unused funds roll into reserve accounts

9
Foundation Funds

• Private party donations
• Use for work-related recognition, team-building
  dinners, professional development
• Birthday gifts/parties, baby gifts/showers,
  holiday gifts not permitted
• Funds may roll depending on account type

10
Agency Funds

• Funds from a third party for non-University
  business purpose
• Purchases must reflect purpose of agency account
• Not required to follow state purchasing
  regulations
• Unused funds roll

11
Federal Funds

• Funds from a federal agency (grant funds)
• Purchases must reflect those included in grant
  application
• Special regulations apply

12
What funds do I use?

• 1st Choice EG
• 2nd Choice Student Activity
• 3rd Choice Foundation

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Off-Campus Accounts

• All financial transactions related to official
  university business are to be maintained
  on-campus
• Off-campus bank accounts are not permitted

14
Financial Fandango
Demonstrate your financial wizardry!

• Lifelines
• Eliminate an answer
• Call on a colleague
• Poll the audience

15
You are interviewing candidates for a vacant
position in your department. Which funds are the
best to use to pay for the candidates travel
expenses?

• A. Student Activity

B. EG
C. Agency
D. Foundation
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BUDGET DEVELOPMENT
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Revenue Projections

• Use data from past three years to analyze
• Compare previous forecasts to actual revenue
• Identify underlining trends factors influencing
  past, present and future revenues for each
  good/service
• Develop forecast for upcoming year (monthly
  projection)
• Need 1-year 5-year projections

18
Cost Projections

• Use data from past three years to analyze
• Compare previous forecasts to actual costs
• Identify underlining trends factors influencing
  past, present and future costs
• Develop forecast for upcoming year (monthly
  projection)
• Need 1-year 5-year projections

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Increases for FY 2009

• Merit raises estimate 4 for prof./admin.
  staff effective 1/1/09
• Health insurance estimate 14 effective 1/1/09
• Minimum wage from 5.85 to 6.55 effective July
  24, 2008
• Graduate assistantships from 5,850 to 6,850
  for fall/spring
• New letterhead business cards for new phone
  numbers

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Requesting More Money

• Annual/Ongoing Will incur expense every year
• Increase in salaries, benefits
• Software maintenance other annual contracts
• One-Time/Start-Up Will incur expense only once
• New copier machine, computer, furniture, etc.
• When requesting additional funds, always address
  total costs in your proposal (one-time/startup
  annual/ongoing)
• Save your requests for BIG TICKET ITEMS!

21
TRANSFERRING FUNDS
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Rules for Budget Transfers

• Cannot transfer between different fund types
  (EG, Student Activity, Agency, Federal,
  Auxiliary)
• Must be approved by VP
• Restrictions depending on budget line fund
  source

23
Moving EG Funds
Presidents approval required unless lapse
salary
24
Moving Student Activity Funds
Presidents approval required unless lapse
salary
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Lapse Salary

• Can transfer funds from prof/admin or staff
  salary to casual labor to perform duties of
  vacant position (up to 12 weeks)
• Position must be vacant to move funds
• To determine amount available
• Hourly salary x 8 hours x days position vacant
• Subtract vacation pay out (VPO)

26
When Errors Occur

• Use Expenditure Transfer form to move posted
  transaction from one account/ department to
  another
• Request payroll reallocation if labor expenses
  post to the wrong account or department
• VP approval required

27
Financial Fandango
Demonstrate your financial wizardry!

• Lifelines
• Eliminate an answer
• Call on a colleague
• Poll the audience

28
You need to purchase a camcorder costing 800.
What is the preferred purchasing method?

• A. PCard

B. Purchase requisition
C. Personal funds with reimbursement
D. Petty cash
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SALARIES
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Salary Adjustments for New Hires

• Proposed salary is more than budget line
• Increase from another salary line (Presidents
  approval required) or operating
• VP approval to HR may be required
• Proposed salary is less than budget line
• Salary savings to President unless he approves a
  reallocation to another line

31
TRAVEL PURCHASING GUIDELINES
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Employee Travel

• Authority to travel request to Accounting Office
  at least 15 days prior to travel
• Follow state travel regulations (see Controller
  website)
• Use good judgment when spending other peoples
  money

33
Candidate Travel

• Can use EG funds to pay for candidates expenses
• Direct billing for flight available through Burns
  World Travel
• Request direct billing from hotel

34
Candidate Travel

• Meals
• 28/day allowance for meals
• Candidate can pay for their own meals and submit
  travel expense statement for reimbursement
• Staff member can be reimbursed for candidates
  meal (submit travel expense statement)
• Employee meals can only be reimbursed with
  Foundation funds
• Student meals can be paid for with Student
  Activity funds

35
Student Group Travel

• Individual authority to travel requests needed
  only if student is traveling at GSUs request
  (part of job requirement or asked to present at
  conference)
• Avoid reimbursement process if possible (for
  students)

36
Student Group Travel

• Can request travel advance for meal stipends for
  students (students must sign log when receive )
• Pay for student hotel rooms with PCard (if group
  travel coded

37
Financial Fandango
Demonstrate your financial wizardry!

• Lifelines
• Eliminate an answer
• Call on a colleague
• Poll the audience

38
You travel to Atlanta in a state vehicle need
to purchase gasoline. Whats the best method of
payment?

• A. American Express

B. Cash
C. PCard
D. Wright Express Card
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Purchasing Limits
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Prioritized Source

• Statewide contracts (i.e. computers, office
  supplies, office furniture, vehicles)
• Agency contracts (i.e. tour bus rental,
  Coca-Cola, letterhead, janitorial supplies)
• Open market purchases

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Prioritized Method

• Procurement Card
• Purchase requisition over 5,000 or restricted
  items
• Petty cash established fund or reimbursement
• Issues Sales tax, security, out-of-pocket
  expense, preapproval

42
Procurement Card Regulations

• Cardholders may not approve their own
  transactions (WORKS or transmittal sheet)
• Cannot use someone elses card
• Special form required for team/group travel and
  food purchases
• Do not split orders to avoid limits

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Procurement Card Restrictions

• Computers
• Software (MSD is acceptable)
• Dues
• Foundation fund purchases
• Hazardous materials
• Inventoried equipment
• Maintenance contracts
• Petroleum

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Procurement Card Restrictions

• Personal items (i.e. stamps, greeting cards,
  flowers, gifts, coffee pots, refreshments, first
  aid supplies, etc.) special cases allowed for
  student activity funds, but DOCUMENT
• Purchases requiring signing an agreement
• Travel expenses (except Enterprise car rental in
  GA or pre-approved student travel)
• Purchases over 5,000
• Telecommunications equipment

45
Procurement Card Restrictions

• Sales tax
• Negotiable instruments (i.e. gift cards or
  discount coupons)
• Technology purchases over 1,000
• Real estate rental, including storage contract
  fees
• Agency fund purchases

46
Financial Fandango
Demonstrate your financial wizardry!

• Lifelines
• Eliminate an answer
• Call on a colleague
• Poll the audience

47
You are attending a conference and need to pay
for the registration fee. What is the preferred
purchasing method?

• A. American Express

B. Personal credit card
C. Purchase requisition
D. PCard as long as the fee doesnt include
membership dues
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Gift Cards

• Transfer form required (recipient must sign)
• Recommendations
• students only
• reasonable dollar amount
• vendor that does not sell alcohol

49
Departmental Workshops

• Must be preapproved by VP
• Send proposal with the following info
• Who will attend
• Purpose
• Location, date(s) time
• Funding source(s), itemized cost estimate (use
  categories such as food, decorations, give aways,
  etc.), total cost

50
Cash Management

• Must record when money is received (receipt
  system) amount, date, description
• Audit trail is important
• If dont receive cash on a daily basis, can
  deposit funds weekly
• Keep cash in lock box or vault with limited
  access
• Periodically balance petty cash change funds
  (at least monthly)

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Petty Cash Management

• Use a voucher system
• Keep log with withdrawal info (date, purpose,
  amount withdrawn, name of person approving
  withdrawal, name of person receiving funds,
  signature of person receiving funds)
• When person returns with receipt, record actual
  amount, vendor, speedchart account to be
  charged, amount of funds returned
• If a reimbursement, purchase should be preapproved

52
Important Accounting Tips

• Codes in the chartstream (including account
  numbers) are used to automatically generate
  reports for the University
• Always spend money in the department that is
  performing the service. Expenses should be posted
  in the department that best reflects the use of
  funds.

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Important Accounting Tips

• Example VP funds year-end request for Registrar
• VP program code 16100 (Institutional Support
  Executive Management)
• Registrar program code 15600 (Student Services
  Student Records/Registrar)
• If expense posted to VP department, would be
  reported with the wrong category

54
Important Accounting Tips

• Choose an account number that accurately reflects
  the type of purchase
• Dont overuse 714100 Supplies Materials and
  714110 Supplies Materials-Office (may need to
  use 727100 Other Operating Expense instead)
• Do not use 714900 Purchase Card Expense

55
Financial Fandango
Demonstrate your financial wizardry!

• Lifelines
• Eliminate an answer
• Call on a colleague
• Poll the audience

56
You travel to Atlanta to attend the Admissions
reception. What is your per diem for meals?

• A. 20 per meal

B. 28 per day
C. 36 per day
D. No limit
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AUDITS
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Record Keeping

• For every financial exchange, keep copies of
  documentation
• May receive question about a transaction during
  an audit or a review
• Refer to USG Records Retention Guidelines for
  details of what needs to be kept and for how long

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Record Keeping Methods

• Hard copies organized by payment method and/or
  date
• 3-ring binder
• File folders
• Electronic copies
• Computer files use Quicken to track
  categorize revenue expenses, reconcile, produce
  reports

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Responsibility

• Always review receipts before processing!
• Dont sign your name to anything you have not
  reviewed or do not agree with!