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Budgeting 101 for New Administrators University of Maryland, College Park Cynthia R. Hale Associate Vice President for Finance and Personnel Office of the Senior Vice President and Provost Peg Hinkle, Research Analyst Office of the Senior Vice President and Provost August 2013 Office of the Senior Vice President and Provost Slide 2 Table of Contents Campus Budget Overview Budgeting at the Local Level Glossary of Budget Terms DRIF Distribution Finding Resources Tools for Fiscal Oversight Financial Systems Top Ten Tips Office of the Senior Vice President and Provost Slide 3 University of Maryland, College Park FY 2013 Total Operating Budget: Revenue FY2013 TOTAL OPERATING BUDGET: REVENUE Total Unrestricted Revenue$1,307,808,578 Total Restricted Revenue$428,056,165 FY13 TOTAL OPERATING BUDGET $1,735,864,743 State increased total FY14 appropriation by 7.3% to $447 M; 3% tuition increase for UG residents approved Tuition & Fees 27% Auxiliary Enterprises 14% Gov't & Private Gifts, Grants 6% Federal Grants & Contracts 18% Sales & Services- Educ Activities 2% Other 3% State Appropriations 24% Private Gifts, Grants, Contr. 3% State/ Local Grants & Contracts 3% Slide 4 Office of the Senior Vice President and Provost FY 2012 Tuition Revenue Sources * Entrepreneurial revenue from Academic Programs makes up $57.3 M. $57.6 M is generated from Self-Supporting Operations. UG Non-Resident $143.7 M UG Resident $131.4 M Non-State-Supported $57.6 M Other Entrepreneurial $3.1 M GR Entrepreneurial $54.2 M Admin Fees $8.2 M GR Non-Resident $18.7 M GR Resident $35.9 M *FY13 source breakdown not available. Slide 5 Office of the Senior Vice President and Provost FY2013 TOTAL BUDGET: EXPENDITURES Salaries & Fringe Benefits$1,065,834,126 Grants (Scholarships & Remissions)$127,666,293 Fuel & Utilities$65,843,429 Equipment, Supplies, & Vehicle Operations$117,275,986 Fixed Charges, Debt Service, Rentals & Contracts$253,546,074 Land & Structures$56,688,108 Travel & Communication$49,010,727 TOTAL EXPENDITURES $1,735,864,743 University of Maryland, College Park FY 2013 Total Budget by Expenditure Category Salaries & Fringes Travel & Comm. Land & Structures Fixed Charges, etc. Equip., Supplies & Vehicle Operations Fuel & Utilities Grants (Scholarships & Remissions) Slide 6 Office of the Senior Vice President and Provost Fund Balance : The cumulative year-end balance of various departmental accounts including state roll-forward, DRIF, revolving accounts. It does not include gift funds held in the Foundations. Soft Money: Funds received on a one time basis with no commitment of future allocation. DRIF, Summer/Winter and entrepreneurial revenues are considered soft money. Hard Money: State allocated funds that are considered to be guaranteed year to year; COLA, MERIT and Fringe Benefits are allocated for hard money accounts. FTE/Lines: Full Time Equivalent a budgetary device that assigns fringe benefits from the campus Fringe Benefit Pool to a particular position. Only available in hard (state) budgets. DRIF: A formulaic distribution of the F&A (overhead) produced by a programs sponsored research activity. To be used for research related activity. Glossary of Terms Slide 7 Office of the Senior Vice President and Provost Glossary of Terms (contd.) Revolving Account: A n account into which soft money is transferred; the balance at the end of the fiscal year typically rolls forward. Summer/Winter term accounts, DRIF accounts are considered revolving. Plant Funds: A central account, tied to the program, where programs transfer or save funds for future construction and renovation project. A prudent way to manage fund balances. Restricted Funds : Funds received for which there is a proscribed purpose such as sponsored research grants and contracts and gifts for which the donor provided explicit directions. Administrators are responsible for assuring the funds are spent appropriately. Interest Income: Annual income generated by endowments, which are always held in one of the foundations. Income is typically slightly less than 5% of the endowment value. It is used to reimburse program for costs incurred by the endowed chair or related activity. Slide 8 Office of the Senior Vice President and Provost Glossary of Terms (contd.) Underwater Accounts: Gift accounts held in the foundations, the value of which is less than the original gift, due to poor performance by the investment portfolio. Accounts are often frozen until the original value is restored. KUALI: A national consortium of universities to develop open source software which will support universities in perpetuity without the cost of commercial products or licenses. UM has been a member since 2007. We expect to replace our current financial system (FRS) with KUALI Financial in January; KUALI Student Services is under development. Slide 9 Office of the Senior Vice President and Provost Recipients% of Total 1)Academic Departments 33% 2)Academic Deans 24% 3)Office of the Provost 24% 4)Graduate Dean 17% 5)Libraries & Undergraduate Studies 2% TOTAL100% The total FY 2013 DRIF budget was $39,099,416 Calculated on F&A generated by expenditures two years prior FY14 DRIF was produced in FY12 50% of F&A revenues support the base budget of the campus Designated Research Funding Initiative (DRIF) Slide 10 Office of the Senior Vice President and Provost Fund Balance Unspent $ DRIF Summer/Winter Revenue Entrepreneurial Programs Development Foundation Accounts Graduate School Deans Office Provosts Office VP for Research Office Facilities Council Special Initiatives Funding New Initiatives Internal External Slide 11 Office of the Senior Vice President and Provost Develop a report that includes information you need to monitor your accounts and resources: Revised budgets across multiple accounts Projected expenditures Projected balances Current list of employees and salaries Accounts receivable who owes you money Effective Fiscal Oversight Slide 12 Office of the Senior Vice President and Provost Official Accounting Records FRS Financial Records Systems accounting BPM Budget Preparation and Maintenance System budget management PHR Payroll & Human Resources KFS Kuali Financial System January 2014 Foundation Accounts UMCPF & USMF University Financial Systems Slide 13 Office of the Senior Vice President and Provost Top 10 Safety Tips for New Administrators 1.Develop strong working relationships with your College Budget Officer and your Business Manager 2.Establish a culture of integrity and openness 3.There are no secrets - Diamondback Salary inset 4.Dont make promises you cant honor 5.Wear your campus hat idiosyncratic credits Slide 14 Office of the Senior Vice President and Provost Top 10 Safety Tips for New Administrators 6. Keep careful records of all commitments 7. Dont hoard - but develop a financial safety net 8. Avoid a bad audit by training and empowering staff 9. Beware of setting precedents 10. Surprises are never popular with deans & provosts. Slide 15 Office of the Senior Vice President and Provost Balance Creativity Compliance