YEAR END FINANCIAL PLANNING

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YEAR END FINANCIAL PLANNING
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BACKGROUND

• Need to bring year-end balances for all 199xx
  accounts to within 5 of budget so that State of
  California and UCOP better understand the need
  for, and nature of, carry forward funds.

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TARGETED FUNDS

• OP fund numbers 19900-19999
• Both charts 3 and L
• Across all functions (i.e. instruction, organized
  research, cooperative extension)
• Extramural funds are NOT included

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PROCESS

• Determine projected year-end balances for each
  targeted account
• Calculate the recommended maximum carry forward
  (5 of permanently budgeted funds or 5 of
  current appropriations for non-permanently
  budgeted funds, such as indirect cost recovery
  funds)
• Create appropriate DaFIS Departmental Encumbrance
  documents (DE) to bring account balances to 5
  carry forward or less

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Sowhere should we start?
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DETERMINE TOTAL BASE BUDGET FOR 19900 FUNDS(STEP
1)

• Run Decision Support report 58 with the
  following parameters
• Fiscal Year current
• Fiscal Period current
• Charts 3, L
• Organization Code 4 character org code
• Sub Fund Group GENFND
• Check the Include Pending? box
• Check box BASE BUDGET (for general funds)
• Output Format spreadsheet

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DECISION SUPPORT REPORT 58
ATXC
GENFND
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PROJECT YEAR-END BALANCES FOR TARGETED
ACCOUNTS(STEP 2a)

• Run Decision Support report 55 with the
  following parameters
• Fiscal Year current
• Fiscal Period current
• Charts 3, L
• Organization Code 4 character org code
• Sub Fund Group GEN
• Output Format spreadsheet

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DECISION SUPPORT REPORT 55
ATXC
GEN
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PROJECT YEAR-END BALANCES FOR TARGETED
ACCOUNTS(STEP 2b)

• Add a Pending Documents column to spreadsheet
  generated in Step 1 after the Balance Column
• Record any transactions of significant dollar
  value not yet appearing on ledger (e.g. June
  payroll for term academic employees, anticipated
  feeds from recharge units, etc.)
• Add an Adjusted Balance column to show account
  balance after pending transactions
• Total the Adjusted Balance column

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SPREADSHEET EXAMPLEHERE
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DETERMINE BUDGET(STEP 3)

• Using the spreadsheet generated in Step 2 (Report
  55)
• Add a Budget column
• For 19900 accounts, put (or cut/paste) the total
  base budget from Report 58, from Step 1, into
  this new column
• For 19901-19999 accounts, put the total of the
  appropriations column in this spreadsheet within
  each subfund group into the new Budget column

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SPREADSHEET EXAMPLEHERE
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DETERMINE MAXIMUM CARRY FORWARD(STEP 4)

• Still using the spreadsheet generated in Step 2
  (Report 55)
• Add a 5 CF Limit column
• Calculate the 5 Carry Forward Limit by
  multiplying the total of the Budget column by .05

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SPREADSHEET EXAMPLEHERE
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DETERMINE FUNDS TO ENCUMBER(STEP 5)

• Now, add a Minimum Amount to Encumber column
• Calculate the Minimum Amount to Encumber by
  subtracting the 5 CF Limit column from the
  Adjusted Balance Column
• For any account with a positive amount in this
  column, identify funds that can be encumbered to
  reduce the balance
• Prepare DaFIS Departmental Encumbrance (DE)
  documents for identified funds

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WHEW!!!Wasnt that fun???
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OK..Everybody stand up..
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Take a deep breath..
20
Turn to your right and give the person in front
of you a shoulder rub.
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Turn the other direction and give that person a
shoulder rub.
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Ok, have a seattheres more fun stuff to come
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REVIEW OF DEPARTMENTAL ENCUMBRANCE DOCUMENT
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USE OF THE DEPARTMENTAL ENCUMBRANCE DOCUMENT (DE)

• Used to reserve funds for specific departmental
  commitments
• Can increase or decrease committed amount

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THREE TYPES OF ENCUMBRANCES

• Internal encumbrance
• External encumbrance
• Pre-encumbrance

All encumbrances will carry forward to the next
year if not specifically closed by the user.
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EXTERNAL ENCUMBRANCES (EX)

• Official University commitments, generated by a
  Purchase Order
• Not to be used by departmental DaFIS users

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PRE-ENCUMBRANCES (PE)

• Do not actually put a hold or lien on
  departmental funds
• Will only show on Decision Support reports if
  Pre-Encumbrance check box is checked
• For information and planning purposes only.
• Not recommended for use by departmental DaFIS
  users

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INTERNAL ENCUMBRANCES (IE)

• Unofficial liens established and maintained by
  the departments
• Recommended for use by Departments

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DEPARTMENTAL ENCUMBRANCE DOCUMENT
IE
Encumbrance types are also referred to as Bal
Types. Default is IE.
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FISCAL PERIODS

• How many fiscal periods are in a fiscal
  year?

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FISCAL PERIODS

• Each fiscal year has 13 periods
• Period 1 July
• Period 2 August
• Period 12 June Preliminary
• Period 13 June Final

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FISCAL YEARS

• Which of the following is FY 2003?
• A. July 1, 2002 through June 30, 2003
• B. July 1, 2003 through June 30, 2004

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FISCAL YEARS

• The Answer is A
• Fiscal Year 2003 is from
• July 1, 2002 through June 30, 2003

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DEPARTMENTAL ENCUMBRANCE DOCUMENT
Fiscal Period/Fiscal Year Here
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REVERSAL DATE

• Is an optional field
• Identifies the date that the encumbrance entry
  will be automatically reversed on your ledgers
• When entering a reversal date, remember that
  payroll and some TP transactions do not show on
  the ledger until the first week of the next
  month, which delays the close of fiscal periods
  until after the first week of the following month
  
• So, make sure you choose a reversal date that
  will be after the close of the prior fiscal
  period, such as the 20th of the month, to ensure
  that your encumbrance reverses in the correct
  fiscal period
• For example, we can be relatively sure that the
  June Final ledger will be closed by August 20,
  2002

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DEPARTMENTAL ENCUMBRANCE DOCUMENT
08/20/02
Reversal Date Here
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WHAT SHOULD BE ENCUMBERED?

• Start up funds
• Lab renovation funds
• Bridge funding
• Multi-year projects
• Other categories (your ideas???)

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THINGS TO REMEMBER

• Enter a meaningful description (e.g.. Start up
  funding-Johnson)
• Enter specific details of the transaction in the
  explanation field
• Do not change the default balance type of IE

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THINGS TO REMEMBER WHEN CREATING ENCUMBRANCES

• When CREATING a new encumbrance, enter a
  positive line amount and no prior document
  number.
• If the date the encumbrance should be reversed is
  known, enter that date in the reversal date
  field. (Remember the rules about choosing
  reversal dates)

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EXAMPLE 1 Start Up Funding
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Create Encumbrance with No Reversal Date
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THINGS TO REMEMBERWHEN CHANGING ENCUMBRANCES

• When INCREASING an encumbrance
• Template the original DE document
• Enter a positive line amount
• Enter the prior DE document number
• When DECREASING an encumbrance
• Template the original DE document
• Enter a negative line amount
• Enter the prior DE document number

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Decrease Encumbrance (Lab Renovation)
05 2003
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QUESTION ????

• Who needs chocolate about now?
• Caffeine, anyone???
• A vacation?????

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THE REAL QUESTION

• When should the encumbrance for the purchase of
  equipment be removed?

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Decrease Encumbrance(Lab Equipment)
02 2003
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THINGS TO REMEMBERWHEN REMOVING ENCUMBRANCES

• When REMOVING an encumbrance.
• Template the original DE document
• Enter a negative line amount
• Enter the prior DE document number
• Make sure the reversal date is blank.

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EXAMPLE 2Bridge Funding
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Create Encumbrance with No Reversal Date
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Remove Encumbrance
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EXAMPLE 3 Multi-Year State Grant

• Five-year state grant awarded
• Grant period July 1, 1999 June 30, 2004
• Funding for all five years of the grant was
• received May 15, 1999
• Year 3 of grant will end next week---June 30,
  2002
• Need to encumber Years 4 and 5 funds

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Create Year 4 Encumbrance with Reversal Date
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Create Year 5 Encumbrance with Reversal Date
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Additional information about the Departmental
Encumbrance document may be found
athttp//dafis.ucdavis.edu/olrm/index.cfm?docD
E
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MANAGING ENCUMBRANCES

• Think about how you might want to use the
  tracking number to manage encumbrances using
  Decision Support Report 46

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DECISION SUPPORT REPORT 46
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DECISION SUPPORT REPORT 46
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QUESTIONS ???????