New Administrators
Orientation
Budget and Business Processes
Lori McMahon
Associate Provost for Academic Budget and Personnel
July 9, 2015
Academic Budget and Personnel
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Faculty salary administration
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“All Funds” management for division (80% of campus activities)
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New full-time and part-time faculty hiring
Re-appointments
Administrative appointments (permanent, interim, temporary short-term)
Tenure Promotions
Leave (FML, Educational, Personal, Re-assignment of Duties)
Special Pays
New position funding for all types (EPA faculty, EPA Staff, SPA Staff)
General Funds (State appropriations)
Tuition and Fees including E & T, Summer School, DE, Continuing Ed, Graduate Tuition Increments, Majors, etc.
Institutional Trust Funds, including Discretionary, Scholarships, Program and Project, Distinguished Professors
Auxiliary as “Re-charge Units”
Sponsored Programs (Grants and Contracts)
Receipt-generated
Manage annual Budget Request and Allocations process
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7 Colleges, UCOL. Grad School, Library
9 Service Units: Research & Ec Development, IT, IR, Enrollment Mgmt, Academic Services, ADVANCE FADO, OIP, MSEAP
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Signature authority for Provost to approve expenses and salary commitments
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Division liaison to Business Affairs, most frequently with University Budget, Personnel and Analysis and
Financial Services (Controller, Treasury Services, Materials Management, etc.), Human Resources, Risk and
Insurance; plus, Internal Audit, Legal Affairs
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Compliance: policy ‘owner’ or policy ‘champion’; SACS Accreditation/personnel only
Funding Buckets
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RECURRING
FUNDS
NON-RECURRING
FUNDS
aka “Permanent Funding”
• Salaries
• Operating
aka “One-Time Funding”
• Special Projects
• Renovations
• Trial Programs / Start ups
• Equipment Replacements
• Furnishings Replacements
The Many Colors of Money
• Determined when money comes INTO the University.
• Cannot be changed by anyone within the University.
• Drives many accounting decisions (fund accounting)
with compliance and audit implications.
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Unrestricted Funds
• State General Funds
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The total $ amount as appropriated funds to the campus
Chancellor (campus) decides how/where to further allocate and spend
• Tuition and Fee Revenue
$6,532 NC Res/UG/12+ Credit Hours
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Fees are an increasing proportion of campus resources; Fee rates finalized each mid-July
Fees represent 45%(+) of what a fully enrolled in-state UG student pays for FY16
Education and Technology (E&T) Fee
Graduate Tuition Increments
Special Fees (Majors, College, Course, International Student, etc.)
General Fees (Athletics, Health Services, Debt Service)
Other Fees: ID, Food Services Facilities, Campus Security,
Transportation, Matriculation, UNC System Student Assoc
Distance Education and Summer Fees
Unrestricted Funds cont’d
• Institutional Trust Funds (ITF)
– a mix of resources that will need to intentionally and proportionally grow to
offset pricing constraints with tuition and fees
• Unrestricted gifts
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Endowment income (unrestricted endowments)
Contract/Grant residuals
Certain Conference residuals
F&A Funds (Overhead Receipts, 54.95% Faculty/Staff Regular
Research On Campus)
– Sales and Services (Recharge Units, Conf. & Event fees)
– Student Auxiliary funds
– Student Fees
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Restricted Funds
• Must be determined by external parties
• Institutional Trust Funds:
– Grants and contracts (except exchange transactions)
– Restricted Gifts
• Restricted by donor for the college or department
• Can be further restricted as to how one spends the funds
(e.g. scholarships only)
• Income generated from restricted endowments
• Restricted Appropriations
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Discretionary Funds
• Can be Restricted or Unrestricted
• Restricted Funds: if the outside party did not restrict
funds to certain account codes (books, scholarships),
funds can usually be labeled as discretionary
– Must still have a business purpose and follow all the
expenditures policies and procedures of the University
• Identification of Discretionary Funds
– Moving forward…New funds will be marked when newly
created as discretionary (if applicable)
– Older existing funds will be reviewed at department’s
request to see if they qualify for discretionary spending
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Other Types of Funds
• Endowment funds
• Agency funds (eg. Student associations)
• Capital funds
• Debt Service funds
• Annuity and Life Income funds
• Loan funds
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Endowment Funds
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True Endowment Funds
– Only created due to contribution of an outside party
– Must be held in perpetuity
– Only the income can be spent (interest generated from principle earnings; i.e.,
spending policy)
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Quasi Endowment Funds
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Restricted if formed with restricted sources
Unrestricted if formed with unrestricted sources
Function like endowments
Management/Board decision to treat funds as endowment
Generally, only income is spent, but principal can be divested upon management
decision
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Term Endowment Funds
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Treasury Services: Jane Johansen, Director, x75432
Summary of Fund Types
Main fund types generally used on campus for spending purposes
Type of Fund
Managed By
Fund Number Range
Appropriated
(aka: General Funds)
Budget Office
100000-119999
ITF: Overhead Receipts
Treasury Services
120xxxx
ITF: Unrestricted
Treasury Services
(ie. Discretionary Funds)
137000-139699
ITF: Grants & Contracts
Grants/Contracts Admin.
5xxxxx
ITF: Restricted
(ie. Scholarships)
Treasury Services
6xxxxxx
Agency
Treasury Services
83xxxx
Foundation
Treasury Services
N/A for Chart 1
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Main Colors of Money
at UNC Charlotte
Money comes from
(in the form of…)
Types of
Fund
Purpose Restrictions
Managed
by
State (Appropriations);
Students (Tuition, General Fees);
Misc. (surplus sales, etc.)
General
Mainly Unrestricted. Must be used by
end of fiscal year, 6/30/2xxxx
Budget Office
Students/Customers
ITF: Auxiliary
Unrestricted
Budget Office
Donors (Gifts)
Foundation
(initially)
Must be used consistent with purpose
specified by donor, primarily restricted
but may be unrestricted
Treasury
Services
Research Agencies
(Grants/Contracts Awarded)
ITF: Grants &
Contracts
Must be used consistent with
grant/contract terms; restricted
Grants &
Contracts
Admin.
Designated Student Fees
(e.g. Debt Proceeds paid from
student fees)
Capital
Restricted to designation
Budget Office
Other
ITF
Depends
Treasury Serv.
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Takeaways
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University Funds have different ‘use’ restrictions depending upon the
source of funds
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Discretionary Funds have the most flexibility in terms of use (e.g.,
food/beverages, allowable gifts or awards, gross-up honorarium
payments to presenters in which department pays the individual’s
taxes)
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Policy 601.8 provides spending restrictions on certain funds
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Expenditures can generally be lumped into 3 categories of allowable
transactions:
1. Ordinary business expenditures
2. Unallowable/nonoperational expenditures (eg. $$ discretionary)
3. Expenditures requiring documentation (e.g., via FB&A form)
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Business Processing
Financial Services Department Functions
Accounts Payable
eCommerce
Financial Services
General Accounting
Budget Office
Payroll
Controller’s Office
P-card
Financial Data Admin
Reporting & Fixed Assets
Materials Management
Student Accounts
Treasury Services
Tax
Travel & Complex Payments
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Roles and Responsibilities
Dept.
Fiduciary Responsibility
Head
Fund /
Manages designated funds
Business Manager
Departmental Preparers/
Financial Support Staff
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Adheres to policies
Associate with job
duties
BUDGET / SPENDING CYCLE
BEST PRACTICES
Base budgets appear in Banner July 5-8
Open encumbrances roll forward as expenses
FISCAL YEAR
E&T positive balances may carry forward up to 20% but
expenses assigned to carry forward spent by Oct 30
July 1 – June 30
FALL TERM
Aug 15 – Dec 15
SPRING TERM
Jan 10 – May 15
SUMMER TERMS (2)
May 18 - July 29
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Confirm $$ to program areas, faculty travel, student
wages, faculty start-up, Fall faculty special pays
Confirm Accreditation and Search requests to AA
Develop/update one-time request lists/readiness for Dean
Contract Spring PT Faculty by Thanksgiving
Jan -- Begin prep FY budget requests for Spring submission
Spending commitments should be at 80% by February
One-time allocations confirmed by February/spend by May
Capital purchases requiring a bid/start by early March
Spring Faculty special pays in as EPAFs by April 15
Contract new FT Faculty and renew Lecturers by April 30
Contract Summer School/submit faculty EPAFs by April 30
Contract Fall PT Faculty by May 15
Apr-June is Final Quarter, pay invoices early June or earlier
Faculty pay changes (retention, fall-backs, new/re-appts)
due to AA May 1 (BOG approval meeting is mid-May)
Faculty resignation letters (9 mo) – use June 30th as the last
day and submit letter to AA by June 15th
Grace Murray Hopper, Ph.D.
Rear Admiral, US Naval Reserve and Research Fellow in Engineering and Applied Physics at Harvard’s
Computation Laboratory.
B.A Mathematics/Physics from Vassar, 1928; M.A and Ph.D. Mathematics from Yale University 1930/1934.
“It’s easier
to beg
forgiveness
than to get
permission.”
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…sorry Grace, not so much
in a State institution.
Faculty Special Pays
University Policy 101.15 -- Use appropriate fund source
“Special Pays” use lapse salary $$ from vacant faculty lines as a funding source. EPAFs
should be submitted by April 30th to ensure lapse funding reports are accurate for May.
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Faculty can be paid for work not a part of their standard duties
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Short duration (pay dates match the work period)
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Conducting seminars, workshops and training in other than their home department
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Teaching continuing education or summer school courses
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Dual employment from other state agencies
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Internal grant stipends from the Office of the Provost
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University sanctioned awards
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Sponsored payments during summer term (9 or 11 mo. only)
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Other interim and temporary assignments one year or less
Fiscal Year End
Timing “Traps”
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Travel expenses incurred in May and June, reimbursements submitted after June 10
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Temp wages paid to students in June will not be paid until July of the next fiscal year
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Pcard spending must be completed by early May so expenses hit early June for payout.
Pcard transactions completed in June = expenses will not pay out until next fiscal year.
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Fourth-quarter Special Pays to faculty submitted as EPAFs after May 15 wont show in a
lapse report until June 8-10…this is very, very late for the college business manager to
pull/spend the $$, receive goods, and close out invoicing by June 25th. $$ on the table.
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Capital equipment ($5K and over) purchasing requires a bid process that can take 12
weeks or more to complete (write bid requirements, submit to purchasing, bid is posted,
vendors respond to bids, bids are reviewed/rated, vendor selected, purchase made, goods
delivered, goods ‘received’ in 49er Mart, invoice submitted by vendor, invoice paid).
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“Open encumbrances” as invoices not-yet-paid need to be actively monitored. A vendor
may need to be contacted directly to ensure the invoice is accurate/submitted so it can be
paid by June 25th. Invoices/expenses not paid by June 30th will pay out next FY.
Delegation Criteria
Department Heads (Deans, Associate Provosts) who delegate
financial responsibilities to a Business Manager must:
Prior to delegation -• Consider the circumstances: condition of funds, competence of potential fund
managers, and degree of supervision that will be required.
• Communicate reporting and reconciliation expectations clearly and completely.
• Verify the delegate’s understanding of responsibilities and capacity to execute
them.
During delegation -• Retain fiduciary responsibility for accuracy and compliance and retain
management-level decision making.
• Retain open communication with delegate.
• Regularly monitor and assess each delegate’s performance.
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Financial Activity Guidelines
1)
Planning
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Evaluate financial consequences of activities
Evaluate anticipated costs and benefits
Re-allocate budgets where needed (strategic priorities)
Executing Transactions
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Comply with policies, regulations, grant terms, etc.
Recorded accurately and timely
Reconciled monthly, at minimum & increasingly more frequently as 4th quarter (APRIL JUNE) progresses
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Reporting
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Training and Competence (Technical, Behavioral)
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Corrective Actions
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Timely, Clear, Specific, Documented (if needed)
If frequent, or repeated, assess need for preventive controls, additional training,
and/or sanctions
Fund Management
Departments are responsible for
managing their funds as follows:
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Accurate financial reporting
Prudent, planned spending aligned with University goals
and policies
Safeguard assets
Safeguard confidential and sensitive information
Manage finances effectively (commit 80% by February)
Avoid financial penalties or added costs
Avoid fraud
Accurate Financial Reporting
& Analysis
Department level financial management and analysis must be completed at
least monthly for the following reasons:
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Banner output is used as the basis for management decisions.
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Accounting must be accurate and timely in order for management to
evaluate the status of budgets, funds, cash flow, etc.
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Budgeted labor and expenditure balances by fund and account must remain
in a positive position to ensure that reporting and certifications are
submitted on time to the state and budgeted cash flow is not disrupted.
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Cash flow problems may have a negative impact on vendor relationships
and create complications that affect multiple departments.
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Monthly analysis and validation enable more efficient month-end and
year-end close processes since corrections and other entries are made
timely.
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Accurate Financial Reporting
& Analysis
Corrective Actions:
If reporting exceptions continue to occur, control procedures must
be implemented to correct the situation.
Examples of corrective actions include:
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Revise plan or budget to reflect changed circumstances,
Change or eliminate activities,
Obtain additional funding,
Modify goals or objectives,
Correct transaction errors,
Alter future budget assumptions,
Implement new control procedures,
Document managerial decisions that depart from the budget.
Document any corrective actions taken.
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Spend Money Wisely
All purchases and payments must be:
1. Prudent and in compliance with University spending policies, and
2. Within budgetary constraints
3. Well planned and paced throughout the year (commit 80% by February)
UNIVERSITY POLICY 601.8, APPROPRIATE USE OF
UNIVERSITY FUNDS
Staff and leaders should make a thorough review of this policy to ensure that costs are
allowable and charged appropriately (i.e. Food and Beverage Expense Form/attachments)
Other documents to reference requirements include:
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University PURCHASING MANUAL (49erMart, Direct Payments, P-Card)
University TRAVEL PROCEDURES MANUAL (Pre-Authorization, Reimbursement)
UNC Charlotte PURCHASING CARD MANUAL
Any documents governing grant and contract terms
Safeguarding University Assets
Cash Handling
• All cash, checks, and cash equivalents in excess of $250 are to be
deposited by noon of the next day in accordance with the North
Carolina Daily Deposit Act (NC G.S. 147-77). Exceptions to this
requirement are rare.
– If a department receives cash and/or equivalents that cannot be readily
identified for a purpose, the department needs to contact General
Accounting for direction immediately. These funds are still subject to the
Daily Deposit Act.
• All petty cash and change funds must be authorized by the
Controller’s Office. All cash shortages and excesses must be promptly
reported to a supervisor, who must investigate them immediately. See
the Petty Cash and Change Fund Procedures
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Safeguarding University Assets
Physical Assets
• A physical inventory of all equipment must be conducted on an
annual basis. All discrepancies must be promptly reported and
investigated. See the Fixed Asset Guidebook.
• All thefts of University assets, including cash, must be reported to
the police immediately.
Financial Records
• Adjustments to asset records must be documented and
approved.
• Access to any forms or online resources that can be used to alter
financial balances must be restricted to only those employees
requiring such access to perform their University duties.
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Safeguarding Sensitive Information
Policy 311, Data and Information Access and Security.
When dealing with University financial information, proper safeguards must be
in place to ensure the security of confidential and sensitive data
Assess Your Risks
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Department heads should assess and address risks in all
areas of their operation. Simple steps include:
Determining what information is being collected and stored, and whether
there is a business need to do so and ensuring any sensitive information is
stored securely.
Limiting access
Ensuring proper information security awareness and training, especially
with credit card transactions – PCI DSS Compliance (Payment Card
Industry Data Security Standards)
Regularly reminding employees of security policies
Knowing how to handle a breach. See Policy 311.5
See SANS Security Awareness training information at:
http://itservices.uncc.edu/security/security-awareness
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Avoiding Financial Penalties & Fraud
Special Responsibility Constituent Institution”
(SRCI) under G.S. 116-30.1
The University has been granted additional financial and administrative
authority. If we were found to be negligent or non-compliant with how we
spend funds, we would lose this critical designation.
Shared responsibilities to keep this designation:
– Maintain appropriate administrative staffing, procedures and internal controls
– Resolve significant audit findings within 3 months
– Support the ability to carry out BOG-defined educational mission with our
General Fund budget
– Obtain BOG approval to establish new academic, research, public service or
financial aid programs sourced by the General Fund
– Measure impact on student learning and development
– Submit monthly General Fund budget reports to governing agencies
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Contacts – “ABC & T”
• Academic Affairs:
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Lori McMahon, Associate Provost for Academic Budget and Personnel, 7-5774
Niki Moseley, Budget Manager/General Funds (State Appropriations), 7-5772
Liezl Breitwise, Budget Manager & Analyst/Non-State Funds, 7-5521
• Budget:
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Budget Office website: http://finance.uncc.edu/budget-office
Vacant, Assistant Budget Director, 7-5599
Carrie Smith, Budget Analyst, 7-5003
• Controller:
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General Accounting website: http://finance.uncc.edu/controllers-office/general-accounting
Laura Williams, Controller, 7-5756
Ron Sanders, Assistant Controller, 7-5786
• Treasury Services:
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Treasury Services website: http://finance.uncc.edu/about-us/treasury-services
Jane Johansen, Director, 7-5432
Sonja Austin, Financial Reporting and Outreach, 7-5811