The Financial Life Cycle

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The FinancialLife Cycle
A Presentation for Understanding UH
Business Workshop
October 10, 2008
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The Financial Life Cycle
What Is It ?
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The Financial Life Cycle
University mission
Develop budget
Performance analyzed and reviewed
Financial resources received
Financial report prepared
Deposit funds in Treasury
Accounting dept records expenditures in ledger
Departments make spending decisions
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Financial Life Cycle
The financial life cycle begins with the
Universitys mission. A plan is developed to
prioritize what the University would like to do
to further this mission.
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University of Houston Mission
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University of Houston Mission
http//www.uh.edu/about/leadership/mission/
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The Financial Life Cycle
A budget is developed, based on this plan.
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University of HoustonBudgeted Sources of
Current Funds-FY08
Total 708.6 million
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University of HoustonBudgeted Uses of Current
Funds ByObject-FY08
Total 708.6 million
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The Financial Life Cycle
Funding sources and money become available.
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The Financial Life Cycle
The financial resources are received by the
Treasurers Office.
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The Financial Life Cycle
A UH employee makes a decision on how to spend
money.
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The Financial Life Cycle
Accounting departments (General Accounting,
Accounts Payable, Payroll) record the expenditure
of this money.
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The Financial Life Cycle
Financial Reporting takes all of the financial
information for the University revenues and
expenditures assets and liabilities and
reports this information to the State, fulfilling
the Universitys accountability and stewardship
obligations. This will enable the University to
receive an appropriation for the next fiscal year.
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The Financial Life Cycle
Mission statement
Budget
Performance analysis
Financial resources
Financial reports
Treasury function
Accounting transactions
Spending decisions
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The Financial Life Cycle
Division of Finance Workflow
Budget Office allocates and budgets available
money
Accounts Payable pays department bills
Treasury issues checks to vendors
Treasury receives and deposits money
General Accounting ensures money is in the proper
cost center
General Accounting ensures money is charged to
the appropriate account
Financial Reporting prepares reports for State
oversight agencies
Financial Reporting prepares reports for State
oversight agencies
Finance Office tracks revenue and prepares
monthly internal reports for management
Finance Office tracks expenses and prepares
monthly internal reports for management
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The Financial Life Cycle
Financial Reporting Department Process
Prepare Income Statement and Balance Sheet
Accounting period closes
Analyze and explain significant balance variations
Trial balance prepared
Submit reports to internal administration
management for analysis of operations
Verification Revenues Expenses Additions
Deductions change in equity ?
In necessary, prepare submit reports to State
oversight agencies
Verification Assets Liabilities Equity ?
Develop action plan to address any deficiencies
or concerns
Identify adjusting journal entries (accruals,
closing, reclassification, elimination)
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The Financial Life Cycle
Questions
Additional Discussion