Budget Activity
Budget Roll Forward
Relationship to Reserves
Year End Training
May 21, 2007
May 21, 2007
1
Same World
Different Perspective
The view of
the world
by the
Budget
Office
May 21, 2007
D. Brothwell, CPSLO
The view of the
world by the
accounting office
2
Systemwide Allocation Transfers SWAT
• SWAT documents are a notice to the campus
budget office that additional cash will be
deposited into the campus CSU Operating
Fund
– Budgets should be recorded to reflect the new
revenue and the corresponding spending
authority – net zero
• The revenue will be recorded in FIRMS object code
506100
– Funds could also be transferred out - 680100 would be used
May 21, 2007
D. Brothwell, CPSLO
3
SWAT Accounting Entries
Either a CPO or
an AD-NOAT
never both, CPO
=
Cash/Investment
entry, AD-NOAT =
FBC entry. Both
credit the same
revenue account
(506100)
May 21, 2007
D. Brothwell, CPSLO
4
SWAT Budget Entries
May 21, 2007
D. Brothwell, CPSLO
Budget is
posted to
506100
regardless of
the method of
deposit (ADNOAT or CPO)
then recorded
for expenditure
in the receiving
departments
accounts
5
Balance in SWAT accounts should
be zero
May 21, 2007
D. Brothwell, CPSLO
6
Definitions
• Budget Balance Available (BBA) CSU Fund 485
• Budget – Actuals – Encumbrances = BBA
• If Revenue and Expenditures Budgets NET to Zero, then
BBA + Encumbrances = Fund Balance
May 21, 2007
D. Brothwell, CPSLO
7
Establishing Reserves in Actuals Ledger
485 – CSU Operating Fund
•
Reserve Entire 305002 Fund Balance
–
Ensure the merry-go-round has stopped
•
•
–
–
–
–
May 21, 2007
Accounting - no more entries to impact Fund Balance
Budget Office - no more entries to impact BBA
Allow Time to Calculate Each Reserve Amount
Includes all your CMS Funds within 485
This is a Journal Entry in Actuals Only before Close
The 304XXX Object Codes Must Net to Zero
D. Brothwell, CPSLO
8
Budget Considerations
• Does your campus sweep budget balances
(BBA) to contingency or roll them forward
to the department
– PeopleSoft Fund does not change from year to
year so any differences between what was
accrued and what is paid in the subsequent
year will be processed within the users
account
May 21, 2007
D. Brothwell, CPSLO
9
Budget Considerations
• Managing Contingencies
– Campuses historically manage contingencies
thru the budget process.
• Prior year savings will be a reserve amount in fund
equity
• Budget offices will more than likely establish a
budget for this in order to manage the allocations and
the transfers to departments in the subsequent year
• This budget will not be recorded in the reserve
account
• Pre-closing reserve entries per “Interim Guidelines”
May 21, 2007
D. Brothwell, CPSLO
10
Required Reserve FIRMS Object
Codes for CSU fund 485
• 304018 – Reserve for Encumbrance
• 304016 – Campus/Dept Commitments
• 304015 – Designation and Contingency
Reserve
• 304099 – Reserve Offset
May 21, 2007
D. Brothwell, CPSLO
11
Cal Poly
May 21, 2007
D. Brothwell, CPSLO
12
Sample Reserve Account
Definitions (Cal Poly Perspective)
• 304018 – Reserve for Encumbrance
– Amount equals the total encumbrances in the SAM 6 for the
CSU Operating Fund (CSU Fund 485)
• 304800 – Reserve for Division Commitments
– Amount is equal to the budget balance available for roll
forward to campus divisions (304016 AAT Key)
• 304801 – Reserve for Campus Obligations
– Amount is equal to the budget balance available for roll
forward to campus contingency (304016 AAT key)
• 304802 – Unallocated Campus Reserves
– Represents amounts that will not be budgeted in the
subsequent year and are truly unallocated (304015 AAT key)
May 21, 2007
D. Brothwell, CPSLO
13
Sample Reserve Accounts AAT
Mapping (Cal Poly Perspective)
Amounts in 304017, 304800 and 304801
will be budgeted in the subsequent year,
$7,739,846.
May 21, 2007
D. Brothwell, CPSLO
14
Sample Year End Report – Cal Poly
Perspective
Expense
Tranfer in GF
Total Expense
Budget
Expense
Encumbrance Balance Avail
$ 201,000,000 $ 192,260,154 $ 5,375,689 $
3,364,157
$ (141,625,000) $ (141,625,000) $
$
$ 59,375,000 $ 50,635,154 $ 5,375,689 $
3,364,157
Revenue
$ (59,375,000) $ (59,375,000) $
Net
$
-
$
(8,739,846) $ 5,375,689
Net income will close to
fund balance in the
amount of $8,739,846
May 21, 2007
-
$
$
3,364,157
Encumbrances plus
balance available
equal the amount
to be reserved
(Fund Balance)
D. Brothwell, CPSLO
15
Sample Trial Balance for CSU
Operating Fund as of 7-1-2007
Trial Balance by Fund
For Year to Date through July 1, 2007
For Fund: SL001 -- CSU Operating Fund
Account
Description
Current Period
Current Year
Assets
47,241,756.22
Liabilities
(38,501,910.22)
305002
Fund Balance-Continuing Approp
304018
Reserve for Encumbrances
304800
Reserve for Division Obligations
304801
Reserve for Campus Obligations
304802
Unallocated Campus Reserves
304099
Reserve Offset
Sum of the 304XXX
FIRMS Object Codes
must net to zero
Fund Balance
May 21, 2007
(8,739,846.00)
(5,375,689.00)
(1,567,800.00)
(796,357.00)
(1,000,000.00)
8,739,846.00
(8,739,846.00)
Revenues
0.00
0.00
Expenditures
0.00
0.00
D. Brothwell, CPSLO
16
Sample New Year Budget
Trial Balance by Fund
For Year to Date through July 1, 2007
For Fund: SL001 -- CSU Operating Fund
Account
Description
Current Period
Assets
47,241,756.22
Liabilities
(38,501,910.22)
305002
Fund Balance-Continuing Approp
304018
Reserve for Encumbrances
304800
Reserve for Division Obligations
304801
Reserve for Campus Obligations
304802
Unallocated Campus Reserves
304099
Reserve Offset
(8,739,846.00)
(5,375,689.00)
(1,567,800.00)
(796,357.00)
(1,000,000.00)
8,739,846.00
Fund Balance
May 21, 2007
Current Year
The sum of
304018, 304800
and 304801 is
$7,739,846.
(8,739,846.00)
Revenues
0.00
0.00
Expenditures
0.00
0.00
D. Brothwell, CPSLO
17
Sacramento State
May 21, 2007
D. Brothwell, CPSLO
18
Establishing Reserves in Actuals Ledger
485 – CSU Operating Fund (continued)
•
304018 - Encumbrance Balance at June 30th
–
Ledger KK_DTL_ENC – Query from Ledger_KK
•
Can Obtain JE Detail by PS Fund Value
–
•
Needed if you are using multiple CSU 485 Funds
SAM 6 – Encumbrances Column
Balances
•
May 21, 2007
SAM 7 – State Accruals Column
D. Brothwell, CPSLO
19
Establishing Reserves in Actuals Ledger
485 – CSU Operating Fund (continued)
• 304016 - Determine amounts Designated for
Program, Project or Organizational Unit
–
BBA for these areas per Campus Policy
• Departmental Level
• Division/Program Center Level
• Sweep to Central Pool
–
Sac State Perspective
• Program Centers (like Colleges, HR, Student Affairs,
etc.)
– Budget Balance Available Adjusted for
» All University Expenses (AKA Designated-Line Items)
» Work Study Excess
May 21, 2007
D. Brothwell, CPSLO
20
Establishing Reserves in Actuals Ledger
485 – CSU Operating Fund (continued)
• 304015 - Remaining amount will be
designated for Operations and
Contingencies
–
Sac State Perspective
• Fund Balance less 304018/304016 Reserves
• Amount not rolled into next year’s budget
• 304099 – Fund Balance Offset
–
–
May 21, 2007
Debit amount to = 304018 + 304016 + 304015
304099 Debit Amount = 305002 Credit Amount
D. Brothwell, CPSLO
21
Establishing Reserves in 485 (cont.)
Fund Balance 6/30
305002
-180
-155
Reserve June 30 Balances after Pre-Closing Year-End Journal Entry in Actuals
485 Fund
FIRMS Object Codes
06/07
07/08
FB Reserve for Encumbrances
304018
-15
-20
FB Designated for Program,
Project or Organizational Unit
304016
-25
-18
FB Designated for Operations
and Contingencies
304015
-140
-100
304NEW
n/a
-17
304099
180
155
0
0
FB Designated - new categories
per CABO?
FB Offset for Designated
Reserves
Total of 304XXX Must Equal Zero
May 21, 2007
D. Brothwell, CPSLO
22
Sacramento State’s Perspective
• Reserve amounts are determined at Year End
in Fund 485 (CSU Operating Fund)
– Encumbrance Reserve (Object Code 304018)
• SAM 6 (Encumbrance column total)
• KK_DTL_ENC table
– Query Amounts by Chart Fields
Total
it against SAM 6
– Program/Project/Organizational Unit (Object Code
304016)
• Calculated Budget Balance Available to Divisions
• University-wide Use Fund
– Operations & Contingencies Reserve (Object Code
304015)
• Amount not budgeted for use in the next fiscal year
May 21, 2007
D. Brothwell, CPSLO
23
Sacramento State’s Perspective
Campus Activity as of 6-30-07
2006/07
Budget
Actuals
Revenue
Fees
Other
Total Revenue:
($66,500,000)
($1,000,000)
($67,500,000)
($66,500,000)
($1,000,000)
($67,500,000)
$0
$0
$0
$0
$0
$0
Expense-Payroll
Expense-Other
Transfer In GF
Total Expenses:
$159,000,000
$67,500,000
($159,000,000)
$67,500,000
$159,000,000
$65,000,000
($159,000,000)
$65,000,000
$0
$400,000
$0
$400,000
$0
$2,100,000
$0
$2,100,000
($2,500,000)
$400,000
$2,100,000
CY Chgs
$400,000
$2,000,000
$100,000
Ending Bal
$400,000
$2,000,000
$100,000
Net
$0
Object Code
304018
304016
304015
May 21, 2007
Description
Encumb Reserve
Univ Org Reserve
Contingency Res
Encumbrance
At Year End
Begin Bal
$0
$0
$0
D. Brothwell, CPSLO
BBA
24
Sacramento State’s Perspective
• To Zero Out Budgets or Not to Zero Out
Budgets…That is the Question
– Our campus chose Not to Zero Out Budget
Amounts
• Revenue budget is less than expense budget
– Not budgeting PY roll forward reserve on revenue side
• Under the SAM6 Budget Column:
– Net Budget = Prior year budget roll forward reserves
or
– Net Budget = 304018 + 304016
May 21, 2007
D. Brothwell, CPSLO
25
Sacramento State’s Perspective
• Revenue Budget Setup in Fund 485
– Building Your 2007/08 Budget
• Fee Revenue Projections
• Other Revenue
Total:
May 21, 2007
D. Brothwell, CPSLO
$67.5 M
$1.5 M
$69.0 M
26
Sacramento State’s Perspective
• Revenue Budget Setup – Fund 485
Object Code
304018
304016
304015
At Prior Year End 6-30-07
Description
Begin Bal
Encumb Reserve
$0
Univ Org Reserve
$0
Contingency Res
$0
CY Chgs
$400,000
$2,000,000
$100,000
Ending Bal
$400,000
$2,000,000
$100,000
Campus Revenue Budget as of 7-1-07
2007/08
Revenue
Fees
Other
Total Revenue:
May 21, 2007
Budget
Actuals
($67,500,000)
($1,500,000)
($69,000,000)
D. Brothwell, CPSLO
Encumbrance
$0
$0
BBA
($67,500,000)
($1,500,000)
($69,000,000)
27
Sacramento State’s Perspective
• Expense Budget Setup in Fund 485
– Using a Global DeptID
•Distribute 2007/08 Budget - $228 M:
– State Appropriation = (-$160 M using 690003)
– Fee Revenue = $66 M
– Other Revenue = $1.5 M
•Distribute your Reserve Budgets
May 21, 2007
D. Brothwell, CPSLO
28
Sacramento State’s Perspective
• Expense Budget Setup – Cont’d
– Create CMS Expense Accounts to Separate
your Reserve Amounts (e.g. $2.4 M)
•660884 Encumbrance (304018)
•660885 Division/Organizational Unit (304016)
•660886 University-wide Use Fund (304016)
• Map Accounts to 660003
May 21, 2007
D. Brothwell, CPSLO
29
Sacramento State’s Perspective
• Spreading the Reserves:
– 660884 Encumbrance
$400K
• Allocation Process in CMS (Ledg_KK_Enc)
• Query and upload into CMS
– 660885 Division/Organizational Unit $1.5M
• Use Unique Scenario Chart Field to spread budget
to Divisions
– 660886 University-wide Use Fund $500K
Total: $2.4M
May 21, 2007
D. Brothwell, CPSLO
30
Sacramento State’s Perspective
• Expense Budget Setup – Fund 485
Object Code
304018
304016
304015
At Prior Year End 6-30-07
Description
Begin Bal
Encumb Reserve
$0
Univ Org Reserve
$0
Contingency Res
$0
CY Chgs
$400,000
$2,000,000
$100,000
Ending Bal
$400,000
$2,000,000
$100,000
Campus Expense Budget as of 7-1-07
2007/08
Expense-Payroll
Expense-Other
PY Encumb Res
PY Univ Org Res
Transfer In GF
Total Expenses:
May 21, 2007
Budget
$161,000,000
$68,000,000
$400,000
$2,000,000
($160,000,000)
$71,400,000
D. Brothwell, CPSLO
$0
$0
BBA
$161,000,000
$68,000,000
$400,000
$2,000,000
($160,000,000)
$71,400,000
31
Sacramento State’s Perspective
• Total Budget Setup – Fund 485
Object Code
304018
304016
304015
At Prior Year End 6-30-07
Description
Begin Bal
Encumb Reserve
$0
Univ Org Reserve
$0
Contingency Res
$0
CY Chgs
$400,000
$2,000,000
$100,000
Ending Bal
$400,000
$2,000,000
$100,000
Campus Budget as of 7/1/07
2007/08
Revenue
Fees
Other
Total Revenue:
($67,500,000)
($1,500,000)
($69,000,000)
($67,500,000)
($1,500,000)
($69,000,000)
Expense-Payroll
Expense-Other
PY Encumb Res
PY Univ Org Res
Transfer In GF
Total Expenses:
$160,000,000
$69,000,000
$400,000
$2,000,000
($160,000,000)
$71,400,000
$160,000,000
$69,000,000
$400,000
$2,000,000
($160,000,000)
$71,400,000
Net
May 21, 2007
Budget
Actuals
$2,400,000
D. Brothwell, CPSLO
Encumbrance
$0
$0
$0
$0
BBA
$2,400,000
32
Sacramento State’s Perspective
• Differences Between Zeroing Out and Not
Zeroing Out Budgets on SAM6 Report
– Zero Out Budget
• Net Budget Column = 0
– Don’t Zero Out Budget
• Net Budget Column = Prior Year Roll Forward
Reserve Budget
– Sum of 304018 + 304016
• Total Expense Budget Balance Available = Net
Budget Balance Available
May 21, 2007
D. Brothwell, CPSLO
33
Sacramento State’s Perspective
• Sample 2007/08 Year End Snapshot:
At Prior Year End 6-30-07
Description
Begin Bal
Encumb Reserve
$0
Univ Org Reserve
$0
Contingency Res
$0
Object Code
304018
304016
304015
CY Chgs
$400,000
$2,000,000
$100,000
Ending Bal
$400,000
$2,000,000
$100,000
Campus Activity as of 6-30-08
2007/08
Revenue
Fees
Other
Total Revenue:
($67,500,000)
($1,500,000)
($69,000,000)
($67,500,000)
($1,500,000)
($69,000,000)
Expense-Payroll
Expense-Other
PY Encumb Res
PY Univ Org Res
Transfer In GF
Total Expenses:
$160,000,000
$69,000,000
$400,000
$2,000,000
($160,000,000)
$71,400,000
$160,000,000
$66,000,000
$400,000
$500,000
($160,000,000)
$66,900,000
May Net
21, 2007
Budget
Actuals
D. Brothwell,
CPSLO
$2,400,000
($2,100,000)
Encumbrance
$0
BBA
$0
$0
$0
$0
$300,000
$0
$2,700,000
$0
$1,500,000
$0
$4,200,000
$300,000
$4,200,000
$300,000
34
Sacramento State’s Perspective
• Sample comparison spreadsheet
– Zero Out vs Don’t Zero Out Reserve Budgets
See EXCEL attachment
May 21, 2007
D. Brothwell, CPSLO
35
CSU Monterey Bay
May 21, 2007
D. Brothwell, CPSLO
36
CSUMB Perspective
Year End & Year Beginning
• Most decision points for budget
operations are the same or similar to SLO
and Sac State
– In 2006-07, revenue & expense budgets net to
zero
– At year-end, revenue budget adjusted to
equal actuals
– Expenditure BBA plus encumbrances = fund
balance (after obligations)
May 21, 2007
37
CSUMB Nuances Related to
Sweeping Balances
• Revenue Required in Fund 485
– “Remap” trust projects to Fund 485
• New fund code in old FNAT mapping
• Change FNAT key to Fund 485 for historical fund
code
• Journal entry from historical fund code to new fund
code, thereby satisfying beginning year fund balance
edits
• Historical fund code journal entry has transfers in
and no beginning fund balance
– Impact to Fund 485 – Multiple Fund Codes
May 21, 2007
38
CSUMB: RESERVE ENTRIES
• Definitions Similar to SLO and Sac State
– 304018 – Reserve for Encumbrances
– 304820 – Reserve for Campus/Dept
Obligations
– 304840 – Reserve for Campus Contingency
– 304099 – Fund Balance Offset
– Net to Zero
May 21, 2007
39
CSUMB: RESERVE ENTRIES
• All Entries Now 3-Dimensional Analysis Due to
Multiple Fund Codes and Entered at Fund Code
Level
– Reserve for Encumbrances
• SAM 6 (Encumbrance column total) – Represents Total of All
485 Campus Fund Codes
• KK_DTL_ENC table – 485 Campus Fund Code Specific
– Query Amounts by Chart Fields
Total against SAM 6 Total
– Reserve for Campus Obligations
• Queries set up in advance for trust project fund codes for
revenue and expense actuals as well as main operating fund
– Reserve for Campus Operations & Contingency
May 21, 2007
40
CSUMB: 2007-08 BUDGET POSTING
MAIN OPERATING FUND
• Current Year Revenue and Expense
Budget Will NOT Net to Zero
• Budget Equal to Encumbrance Reserve
Posted with Unique Scenario
– Exploring Distribution in Arrears to Payment
• Budget Equal to Reserve for Campus
Obligations Posted and Distributed with
Unique Scenario
May 21, 2007
41
CSUMB: 2007-08 BUDGET POSTING
MAIN OPERATING FUND
2007-08 Budget
Revenue
Fees
Other
Revenue Total
(10,048,838)
(1,175,000)
(11,223,838)
Expense
Payroll
OE&E
Encumbrance Reserve
Campus Obligations Reserve
Transfer In General Fund
Expense Total
51,735,382
12,933,846
500,000
2,000,000
(53,445,390)
13,723,838
Net Total Budget
2,500,000
End up looking the same as non-sweep campuses
HOW we get there is different…..and HOW we administer reserves is different
May 21, 2007
42