Transcript Document

2010/2011
Budgeting Guidelines
Why do we need a budget?
 A budget is a financial plan that represents an operational
strategy.
 UCLA ledger does not provide a full-year budget perspective.
 UC Regents policy now requires a campus budget with budget
to actual reporting. Possible review during
PricewaterhouseCoopers audit.
 Campus management will be using CBIG to track budget to
actual results to confirm budget reductions are being achieved.
Part of campus management reviews at mid-year.
 APB analysts will be reviewing results quarterly.
August, 2010
2
Academic Planning and Budget
Our Goal
 Create a budget in CBIG that will accurately predict
the full year financial outcome on a quarterly basis.
 Reduce variances by avoiding some of the common
mistakes made during budget creation.
August, 2010
3
Academic Planning and Budget
Topics





Budgeting salaries
Benefits
Fee Remissions
Adjustments to the unexpended balance
Budgeting other activity




Other financial activity
Fund swaps
Contracts and grants
Gifts and endowments
 Budgeting in a “down cycle”
 Variance Analysis
 System Overview and Reminders
August, 2010
4
Academic Planning and Budget
Salaries
2009/10 Budget by Quarter
Q1
Q2
Q3
Q4
1,773,793
133,579
160,676
151,337
2,219,385
1,773,793
133,579
160,676
151,337
2,219,385
1,773,793
133,579
160,676
151,337
2,219,385
225,150
225,150
225,150
225,150
900,600
Faculty Temporary
0
47,977
33,850
32,617
114,444
Academic Apprentice
0
63,246
58,677
55,583
177,506
14,096
1,380
1,380
1,380
18,236
102,494
7,787
102,494
10,029
102,494
5,065
102,494
4,145
409,977
27,026
349,527
450,277
426,616
421,369
1,647,789
69,917
0
63,265
68,376
96,579
62,160
90,348
59,052
320,109
189,588
General Fund Source
Sub-Total Appropriated
Total Revenues
Faculty Ladder
Academic Other
Career Staff
Non-Career Staff
Total Salaries & Wages
Benefits
Fee Remissions
YearTotal
69,917
131,641
158,739
149,400
509,697
419,444
581,918
585,355
570,769
2,157,486
Material and Supplies - General
1,645
8,371
7,051
5,914
22,981
Material and Supplies - Scientific
1,110
56
69
400
1,635
Communications
8,004
10,241
12,442
4,825
35,512
Total Benefits
Total Compensation
0
1,600
6,665
2,613
10,878
Services
5,747
16,527
15,984
2,304
40,561
Consultants/Temp. Services
1,188
1,188
1,188
1,188
4,752
571
1,353
2,230
590
4,745
Equipment (non computer)
3,343
3,343
3,343
3,343
13,370
Operation and Maintenance of Space
Travel and Entertainment
Information Technology
9,189
25
770
183
10,166
Student Support - Underg & Grad
0
0
0
0
0
Other Expense - Control
0
0
0
0
0
Reserves for Auxiliaries
0
0
0
0
0
0
0
0
0
0
Indirect Cost Recovery
Total Operating Expenses
Total Compensation and Operating
Recharges
Total Expenditures
Surplus/(Deficit)
Carryforward (Approp.)
Ending Balance
August, 2010
5
30,796
42,702
49,741
21,360
144,600
450,240
0
624,620
0
635,096
0
592,129
0
2,302,086
0
450,240
624,620
635,096
592,129
2,302,086
1,323,552
82,701
(491,042)
0
(474,420)
0
(440,792)
0
(82,701)
82,701
1,406,254
(491,042)
(474,420)
(440,792)
0
Compensation
is 94% of
total cost.
Academic Planning and Budget
Salaries
Budget by Quarter
Faculty Ladder
Faculty Ladder

Q1
Q2
Q3
Q4
YearTotal
225,150
225,150
225,150
225,150
900,600
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
YearTotal
75,050
75,050
75,050
75,050
75,050
75,050
75,050
75,050
75,050
75,050
75,050
75,050
900,600
Budget creator used even spread for monthly budget
August, 2010
6
Academic Planning and Budget
Salaries
Salary Detail (in Excel): 2009/10 Faculty Salary Budget
Professor A
Professor B
Professor C
Professor D
Professor E
Professor F
Professor G
Professor H
Professor I
OPEN
OPEN
OPEN
July
10,000
6,667
6,250
8,333
5,833
9,583
7,500
10,833
10,050
0
0
0
75,050
August, 2010
August September
10,000
10,000
6,667
6,667
6,250
6,250
8,333
8,333
5,833
5,833
9,583
9,583
7,500
7,500
10,833
10,833
10,050
10,050
0
0
0
0
0
0
75,050
75,050
October November December January
10,000
10,000
10,000
10,000
6,667
6,667
6,667
6,667
6,250
6,250
6,250
6,250
8,333
8,333
8,333
8,333
5,833
5,833
5,833
5,833
9,583
9,583
9,583
9,583
7,500
7,500
7,500
7,500
10,833
10,833
10,833
10,833
10,050
10,050
10,050
10,050
0
0
0
0
0
0
0
0
0
0
0
0
75,050
75,050
75,050
75,050
7
February
10,000
6,667
6,250
8,333
5,833
9,583
7,500
10,833
10,050
0
0
0
75,050
March
10,000
6,667
6,250
8,333
5,833
9,583
7,500
10,833
10,050
0
0
0
75,050
April
10,000
6,667
6,250
8,333
5,833
9,583
7,500
10,833
10,050
0
0
0
75,050
May
10,000
6,667
6,250
8,333
5,833
9,583
7,500
10,833
10,050
0
0
0
75,050
June
10,000
6,667
6,250
8,333
5,833
9,583
7,500
10,833
10,050
0
0
0
75,050
Total
120,000
80,000
75,000
100,000
70,000
115,000
90,000
130,000
120,600
0
0
0
900,600
Academic Planning and Budget
Salaries
Actual Costs By Quarter
Faculty Ladder
August, 2010
Q1
Q2
Q3
Q4
YearTotal
225,985
192,931
281,463
278,313
978,691
8
Academic Planning and Budget
Salaries
2009/10 Budget to Actual Variance: Favorable/(Unfavorable)
BUDGET: Faculty Ladder
ACTUAL: Faculty Ladder
Variance: $
Variance: %
August, 2010
Q1
Q2
Q3
Q4
YearTotal
225,150
225,985
225,150
192,931
225,150
281,463
225,150
278,313
900,600
978,691
(56,313)
-25.0%
(53,163)
-23.6%
(78,091)
-8.7%
(835)
-0.4%
9
32,219
14.3%
Academic Planning and Budget
Question:
What did the department chair and/or MSO know that
wasn’t included in 2009/10 Budget?
August, 2010
10
Academic Planning and Budget
Salaries
Salary Detail (in Excel):
What 2009/10 budget should have looked like (“What If”)
Salary
Reduction
Effective
Sept 1
Professor A
Professor B
Professor C
Professor D
Professor E
Professor F
Professor G
Professor H
Professor I
OPEN/Filled in January
OPEN/Filled in January
OPEN/Filled in January



8%
7%
7%
8%
7%
8%
7%
8%
8%
8%
7%
8%
July
10,000
6,667
6,250
8,333
5,833
9,583
7,500
10,833
10,050
0
0
0
75,050
August
10,000
6,667
6,250
8,333
5,833
9,583
7,500
10,833
10,050
0
0
0
75,050
September
9,200
6,200
5,813
7,667
5,425
8,817
6,975
9,967
9,246
0
0
0
69,309
October November
9,200
9,200
6,200
6,200
5,813
5,813
7,667
7,667
5,425
5,425
8,817
8,817
6,975
6,975
9,967
9,967
9,246
0
0
0
0
0
0
0
69,309
60,063
December
9,200
6,200
5,813
7,667
5,425
8,817
6,975
9,967
0
0
0
0
60,063
January
9,200
6,200
5,813
7,667
5,425
8,817
6,975
9,967
0
10,733
12,400
9,200
92,396
February
9,200
6,200
5,813
7,667
5,425
8,817
6,975
9,967
0
10,733
12,400
9,200
92,396
March
9,200
6,200
5,813
7,667
5,425
8,817
6,975
9,967
0
10,733
12,400
9,200
92,396
April
9,200
6,200
5,813
7,667
5,425
8,817
6,975
9,967
0
10,733
12,400
9,200
92,396
May
9,200
6,200
5,813
7,667
5,425
8,817
6,975
9,967
0
10,733
12,400
9,200
92,396
June
9,200
6,200
5,813
7,667
5,425
8,817
6,975
9,967
0
10,733
12,400
9,200
92,396
Total
112,000
75,333
70,625
93,333
65,917
107,333
84,750
121,333
38,592
64,400
74,400
55,200
963,217
Salary savings from furlough program started in September
Professor I left in October
Three positions filled in January
August, 2010
11
Academic Planning and Budget
Salaries
Actual Versus “What if” budget
Q1
Q2
Q3
Q4
YearTotal
219,409
225,985
189,434
192,931
277,187
281,463
277,187
278,313
963,217
978,691
(6,577)
-3.0%
(3,497)
-1.8%
(4,276)
-1.5%
(1,126)
-0.4%
(15,474)
-1.6%
From earlier chart: Variance from Actual Budget
Variance: $
(835)
Variance: %
-0.4%
32,219
14.3%
(56,313)
-25.0%
(53,163)
-23.6%
(78,091)
-8.7%
"What If" BUDGET: Faculty Ladder
ACTUAL: Faculty Ladder
Variance: $
Variance: %



Reduced variability across quarters
“What If” budget produced minimal dollar variability
“What If” budget produced minimal percentage variability
August, 2010
12
Academic Planning and Budget
Salaries
Salary Detail (in Excel):
2010/11 Proposed Budget
● Professors A, B and C get 5% merit increase effective July 1, 2010
● Salary reductions in effect for only July and August
Scenario:
Annual salary at
June 2010
Salary Reduction
Without Furlough Effective July and
Savings
August
Professor A
Professor B
Professor C
Professor D
Professor E
Professor F
Professor G
Professor H
Professor I: OPEN
Professor J
Professor K
Professor L
Professor M
Professor N
Summary
120,000
80,000
75,000
100,000
70,000
115,000
90,000
130,000
0
140,000
160,000
140,000
160,000
120,000
1,080,000
8%
7%
7%
8%
7%
8%
7%
8%
0%
8%
8%
8%
8%
8%
July
9,660
6,510
6,103
7,667
5,425
8,817
6,975
9,967
0
10,733
12,267
10,733
12,267
9,200
August
9,660
6,510
6,103
7,667
5,425
8,817
6,975
9,967
0
10,733
12,267
10,733
12,267
9,200
September
10,500
7,000
6,563
8,333
5,833
9,583
7,500
10,833
0
11,667
13,333
11,667
13,333
10,000
116,323
116,323
126,146
October November December January
10,500
10,500
10,500
10,500
7,000
7,000
7,000
7,000
6,563
6,563
6,563
6,563
8,333
8,333
8,333
8,333
5,833
5,833
5,833
5,833
9,583
9,583
9,583
9,583
7,500
7,500
7,500
7,500
10,833
10,833
10,833
10,833
0
0
0
0
11,667
11,667
11,667
11,667
13,333
13,333
13,333
13,333
11,667
11,667
11,667
11,667
13,333
13,333
13,333
13,333
10,000
10,000
10,000
10,000
126,146
126,146
126,146
126,146
February
10,500
7,000
6,563
8,333
5,833
9,583
7,500
10,833
0
11,667
13,333
11,667
13,333
10,000
March
10,500
7,000
6,563
8,333
5,833
9,583
7,500
10,833
0
11,667
13,333
11,667
13,333
10,000
April
10,500
7,000
6,563
8,333
5,833
9,583
7,500
10,833
0
11,667
13,333
11,667
13,333
10,000
May
10,500
7,000
6,563
8,333
5,833
9,583
7,500
10,833
0
11,667
13,333
11,667
13,333
10,000
June
10,500
7,000
6,563
8,333
5,833
9,583
7,500
10,833
0
11,667
13,333
11,667
13,333
10,000
Total
124,320
83,020
77,831
98,667
69,183
113,467
88,950
128,267
0
138,133
157,867
138,133
157,867
118,400
126,146
126,146
126,146
126,146
126,146
1,494,105
Include retroactive merits, mid-year retention increases and other case-by-case
adjustments in the salary detail.
August, 2010
13
Academic Planning and Budget
Question:
There was a temporary budget cut associated with the furlough
program in 2009/10. There are two more months of reduced salaries
for non-represented employees in 2010/11(July and August).
What is the impact of the two months of
reduced salaries on 2010/11 funding?
Answer:
Recall that the entire projected twelve months of salary savings was taken as
a budget reduction in 2009/10. There is no additional temporary funding
reduction related to the furlough program in 2010/11.
However, you need to determine if you have a funding shortfall that rolled
over into 2010/11 that is the result from not meeting the entire salary
savings target.
August, 2010
14
Academic Planning and Budget
Question:
What about the furlough/salary savings program with respect to
represented employees?
Answer:
The full temporary budget reduction was taken in 2009/10.
Reduced salaries run through December, 2010.
August, 2010
15
Academic Planning and Budget
Question:
I want to use one of the automated spread rules in CBIG for salaries in
my 2010/11 budget. What can I expect if I use a spread rule on
salaries?
Answer:
Let’s look at an example using the
previously constructed faculty salary budget.
August, 2010
16
Academic Planning and Budget
Using the “Based on Last Year” Spread Rule
A. What would "Spread on Last Year" Look Like:
Percent of salary expense by quarter for 09/10
$ by Quarter for 10/11
Q1
23.1%
344,997
Q2
19.7%
294,535
Q3
28.8%
429,691
Q4
28.4%
424,883
Q1
358,792
24.0%
Q2
378,438
25.3%
Q3
378,438
25.3%
Q4
378,438
25.3%
Total
1,494,105
Q1
358,792
344,997
Q2
378,438
294,535
Q3
378,438
429,691
Q4
378,438
424,883
Total
1,494,105
1,494,106
(51,254)
-13.5%
(46,445)
-12.3%
Total
1,494,106
B. What was the "by month" budget:
"By Month"
% of salary expense by quarter
C. Compare "By Month" to "Spread on Last Year"
By Month
Spread on Last Year
Variance: $
Variance: %
13,795
3.8%
July to December: $
July to December: %
97,697
13.3%
83,902
22.2%
Basis for Mid-Year Variance Report
What is your conclusion about using the “spread rules”?
August, 2010
17
Academic Planning and Budget
Question:
I want to use one of the automated spread rules in CBIG for salaries in my
2010/11 budget. What can I expect if I use a spread rule on salaries?
Answer:
Since we are trying to minimize budget to actual variances, using
automated spread rules for salary will probably not be applicable for
2010/11 due to the different salary savings patterns in 2009/10 and
2010/11.
August, 2010
18
Academic Planning and Budget
Benefits
What is Included in “Benefits”?
Variable costs
 Employer portion of FICA (Social Security and
Medicare)
 7.65% with ceiling on Medicare
 Unemployment insurance
 State disability
 Worker's compensation
 UCRP contribution (4% in 2010/11)
Fixed costs
 Employer portion of Health insurance (but varies
depending on employee plan choice)
 Dental and vision insurance
Hybrid costs
 Vacation accrual and credits (varies based on when
vacations are taken, employee tenure)
August, 2010
19
Academic Planning and Budget
Benefits Considerations for 2010/11



August, 2010
Coordinate with your Associate/Assistant Dean or
Divisional Analyst regarding how to handle this. There
are several options:
 Organizational/division
 Departmental
Unknown increase in health benefits
 Increase will occur in January, 2011
 10% would be a good estimate
Continuation of UCRP contribution
 4% for full-year 2010/11
 Based on “unreduced” salaries for months with
salary reductions and full salaries after furlough
periods end
 The difference between the salary basis (reduced or
full) for the UCRP contribution is not material to the
budget.
20
Academic Planning and Budget
Benefits
Calculating 2010/11 Benefits
STEP 1:
● Download 2009/10 actual benefits and wage costs.
Use Payroll Expense Distribution Report or QDB download
Total Benefits
Total wage *
Benefits as % of wage
347,187
1,285,876
27%
Recall from our Faculty
Salary example that total
ladder costs = $978K.
Balance of costs are for
non-ladder.
Question:
Is knowing last year’s 12-month benefit rate
enough to calculate the 2010/11 benefit rate?
August, 2010
21
Academic Planning and Budget
Benefits
Calculating 2010/11 Benefits
Answer:
There are several factors that make 2010/11 a challenging year with
respect to calculating benefits.



August, 2010
Fluctuating base on which benefits rate is calculated
due to partial-year salary savings from furlough
program. Reduced salaries for part of 2009/10 have
the effect of inflating benefits as a percentage of
wages.
2009/10 had 2.5 months of UCRP contribution.
2010/11 will be a full-year contribution.
Increase in medical costs in January
22
Academic Planning and Budget
Benefits
Calculating 2010/11 Benefits
We suggest looking at benefits in three pieces:
 Medical cost
 UCRP contribution
 Everything else: This includes vacation accrual which will be a dynamic
component of benefits in 2010/11.
 More people will use accrued vacation this year since the furlough
program is ending. This will probably generate more vacation
credits on the ledger.
August, 2010
23
Academic Planning and Budget
Benefits
Calculating 2010/11 Benefits
We’ll fill out this chart to arrive at one approach to calculating benefits:
July to
December,
2010
% of Salaries
January to
June, 2011
Medical
UCRP
Everything Else
Summary Benefit Rate
August, 2010
24
Academic Planning and Budget
Benefits
Calculating 2010/11 Benefits
Medical
• Use payroll reports or data downloads to get medical costs for the
•
•
second half of 2009/2010 (medical increase occurs in January)
Download the corresponding salary data
Increase dollar value of 2009/2010 medical costs by 10%
Example:
January, 2010 to June, 2010 salaries
January to June medical costs
Medical benefits as % of wage
706,750
56,540
8%
10% increase in dollars for January to June 2011
"New" medical benefits as % of wage
62,194
9%
August, 2010
25
Use this as
"medical rate"
for July to
December, 2010
Use this as
"medical rate" for
January to June,
2011
Academic Planning and Budget
Benefits
Calculating 2010/11 Benefits
So far, our benefits chart looks like:
% of Salaries
Medical
UCRP
Everything Else
Summary Benefit Rate
August, 2010
July to
December,
2010
8%
26
January to
June, 2011
9%
Academic Planning and Budget
Benefits
Calculating 2010/11 Benefits
UCRP
Since the UCRP contribution is 4% of wage for all of 2010/11, the next line
of the chart is easy:
July to
December,
2010
8%
4%
% of Salaries
Medical
UCRP
Everything Else
Summary Benefit Rate
August, 2010
27
January to
June, 2011
9%
4%
Academic Planning and Budget
Benefits
Calculating 2010/11 Benefits
“Everything Else”
• 2008/09 was the last “clean year” for benefits (no impact of UCRP
•
•
•
contribution, no furlough, regular use of vacation)
Use payroll reports or data downloads to get benefit information
excluding medical costs for full-year 2008/2009
Download the corresponding salary data
Derive “everything else” as percentage of wage
Example:
July, 2008 to June, 2009 total salaries
July, 2008 to June, 2009 "everything else" benefits
"Everything Else" as % of wage
August, 2010
28
1,250,000
225,000
18%
Use this as
remainder of
benefits rate
Academic Planning and Budget
Benefits
Calculating 2010/11 Benefits
Our completed chart looks like:
% of Salaries
Medical
UCRP
Everything Else
Summary Benefit Rate
July to
December,
2010
8%
4%
18%
30%
January to
June, 2011
9%
4%
18%
31%
2009/10
8%
1%
18%
27%
Benefits as % of salaries could
go up by 3.5% to 4.0%.
August, 2010
29
Academic Planning and Budget
How important is getting the benefits % correct?
Small percentages can translate to large dollars:
Y-T-D(Jun)
Approved Budget
Actual
Variance $
Variance %
36,190,952
36,155,933
35,020
0%
Faculty Temporary
1,924,604
1,619,881
304,724
16%
Academic Apprentice
5,174,295
5,558,953
(384,658)
(7%)
Academic Other
3,815,769
3,683,557
132,212
3%
Career Staff
6,933,663
745,306
6,687,239
736,181
246,423
9,124
4%
1%
54,784,589
54,441,745
342,845
1%
8,771,996
8,957,538
(185,542)
(2%)
Faculty Ladder
Non-Career Staff
Total Salaries & Wages
Benefits
Benefits as % of Wages
16.0%
16.5%
"What if" : Budget constructed at 16.5%:
Total Salaries & Wages
Benefits $
August, 2010
Approved Budget
Actual
Variance $
Variance %
54,784,589
9,039,457
54,441,745
8,957,538
342,845
81,919
1%
1%
30
Note
divergence
of benefits
and salary
variances
Note
variance of
benefits
“floats”
with salary
variance
Academic Planning and Budget
Question:
The department has only one open faculty position planned for
2009/10. In the past five years, the number of open ladder
positions has been as few as three and as many as five.
What impact does that have on the 2010/11 budget?
Answer:
If hiring has “ramped up” over the last two to three years, there
could be a material impact on benefits.
August, 2010
31
Academic Planning and Budget
Fee Remissions (19900 Funds)
2009/10 Actual Versus Budget
Y-T-D(Jun)
Approved Budget
Actual
Variance $
Variance %
33,649,443
34,775,504
1,126,060
3%
33,649,443
34,775,504
1,126,060
3%
33,649,443
34,775,504
1,126,060
3%
16,771,690
16,620,099
151,591
1%
Faculty Temporary
2,042,795
1,276,102
766,693
38%
Academic Apprentice
2,860,177
3,210,177
(350,000)
(12%)
Academic Other
1,468,449
1,192,372
276,078
19%
Career Staff
6,300,544
184,232
6,265,583
181,516
34,961
2,716
1%
1%
29,627,887
28,745,849
882,038
3%
4,453,924
1,024,572
4,282,847
45,041
171,077
979,531
4%
96%
5,478,496
4,327,888
1,150,608
21%
35,106,383
33,073,737
2,032,646
6%
General Fund Source
Sub-Total Appropriated
Total Revenues
Faculty Ladder
Non-Career Staff
Total Salaries & Wages
Benefits
Fee Remissions
Total Benefits
Total Compensation
August, 2010
32
Academic Planning and Budget
Fee Remissions (19900 Funds)
2009/10 Budget by Quarter
Q1
Q2
Q3
Q4
YearTotal
78,511,633
131,925,739
43,253,434
(220,041,363)
33,649,443
78,511,633
131,925,739
43,253,434
(220,041,363)
33,649,443
78,511,633
131,925,739
43,253,434
(220,041,363)
33,649,443
4,206,211
4,168,241
4,182,311
4,214,928
16,771,690
Faculty Temporary
209,670
620,211
556,112
656,801
2,042,795
Academic Apprentice
273,698
833,945
843,079
909,455
2,860,177
Academic Other
607,508
285,853
257,741
317,346
1,468,449
1,534,074
52,897
1,570,033
51,689
1,533,132
33,305
1,663,305
46,340
6,300,544
184,232
6,884,059
7,529,973
7,405,681
7,808,175
29,627,887
990,695
45,270,590
1,026,155
139,550,386
1,238,688
40,166,330
1,198,385
(223,962,734)
4,453,924
1,024,572
46,261,285
140,576,541
41,405,019
(222,764,348)
5,478,496
53,145,344
148,106,514
48,810,699
(214,956,174)
35,106,383
General Fund Source
Sub-Total Appropriated
Total Revenues
Faculty Ladder
Career Staff
Non-Career Staff
Total Salaries & Wages
Benefits
Fee Remissions
Total Benefits
Total Compensation
August, 2010
33
Academic Planning and Budget
Fee Remissions (19900 Funds)
2009/10 Actual by Month
Net expense transfer in June
(includes YTD expense
transfer + June expense)
Fee Remissions
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
YearTotal
4,422
0
0
258,275
250,534
20,420
267,214
252,591
14,502
428,654
141,125
(1,592,697)
45,041
11 months of gross expense

August, 2010
With 2009/10 decentralization of 19900 benefits pool, if YTD fee
remission cost is not zero there could be two different possibilities:
 Funding was provided to offset the cost that resides in the
unit. This would result in higher than budgeted revenue and
higher than budget expense which offsets each other.
 Graduate Division did not perform a complete expense
transfer.
34
Academic Planning and Budget
Fee Remissions
0910 Fee Remissions
Total Activity July to May: 2009/10
% of total July to May occuring in each month
Fee Remission allocaton for 2010/11
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Y earTotal
4,422
0
0
258,275
250,534
20,420
267,214
252,591
14,502
428,654
141,125
(1,592,697)
45,041
Jun
Y earTotal
1,637,737
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
0.3%
0.0%
0.0%
15.8%
15.3%
1.2%
16.3%
15.4%
0.9%
26.2%
8.6%
1,801,511
Jul
Budget for 2010/11by Month: July to May
4,864
Assume June reverses July to May so YTD = 0
4,864
Jul
August, 2010
Aug
-
Aug
-
Sep
-
Sep
-
Oct
284,103
Nov
275,587
Oct
284,103
Nov
275,587
35
Dec
22,462
Dec
22,462
Jan
293,935
Jan
293,935
Feb
277,850
Feb
277,850
Mar
15,952
Mar
15,952
Apr
471,519
Apr
471,519
May
155,238
May
155,238
(1,801,511)
Academic Planning and Budget
0
Fee Remissions
Recommendations
1) Using automated spread rules is not recommended
2) Your fee remission budgeting method depends on which option
you chose in 2009/10 for benefits
3) If you budgeted based on expenses being transferred out and
you actually received funding to offset the expense, this would
be a reasonable variance explanation.
4) If #3 happens, you will probably want to look at 2010/11 results
by removing funding and expenses related to fee remissions
(which should offset one another).
August, 2010
36
Academic Planning and Budget
Adjustments to the Unexpended Balance
2009/10 Budget Vs Actual Results
Department ZZ: Sales and Service
Y-T-D(Jun)
Sales and Service Source
Sub-Total Non-Appropriated
Actual
Variance $
366,484
158,471
(208,014)
(57%)
366,484
158,471
(208,014)
(57%)
Variance %
366,484
158,471
(208,014)
(57%)
Faculty Ladder
0
0
0
0%
Faculty Temporary
0
0
0
0%
Academic Apprentice
0
0
0
0%
Academic Other
0
0
0
0%
992,395
703,687
970,275
426,351
22,120
277,336
2%
39%
1,696,082
1,396,627
299,455
18%
317,553
0
276,443
0
41,110
0
13%
0%
Total Revenues
Career Staff
Non-Career Staff
Total Salaries & Wages
Benefits
Fee Remissions
Total Benefits
Total Compensation
Material and Supplies - General
Material and Supplies - Scientific
Communications
Travel and Entertainment
Services
Consultants/Temp. Services
Information Technology
Equipment (non computer)
Operation and Maintenance of Space
Student Support - Underg & Grad
Other Expense - Control
Reserves for Auxiliaries
Indirect Cost Recovery
Total Operating Expenses
Total Compensation and Operating
Recharges
317,553
276,443
41,110
13%
2,013,635
1,673,070
340,565
17%
155,358
92,321
63,037
41%
5,539
3,007
2,532
46%
27,887
22,801
5,086
18%
6,685
12,428
(5,743)
(86%)
398,510
509,979
(111,469)
(28%)
30,000
28,151
1,849
6%
6,685
8,580
(1,895)
(28%)
286,636
311,716
(25,080)
(9%)
53,100
70,579
(17,479)
(33%)
0
0
0
0%
(62,195)
(93,213)
31,018
50%
0
0
0
0
0
0
0%
0%
908,205
966,350
(58,145)
(6%)
2,921,840
(2,617,551)
2,639,420
(2,235,941)
282,420
(381,610)
10%
(15%)
Total Expenditures
304,289
403,479
(99,190)
(33%)
Surplus/(Deficit)
62,195
(245,009)
(307,204)
(494%)
217,920
(62,195)
217,920
(93,213)
0
(31,018)
0%
(50%)
217,920
(120,301)
(338,221)
(155%)
Carryforward (Non-Approp.)
Adjustments to Unexp. Bal.
Ending Balance
August, 2010
Approved Budget
37
Academic Planning and Budget
Adjustments to the Unexpended Balance
 Many organizations have no such activity
 Occurs primarily in Sales and Service and
Auxiliary funds
 Types of transactions:
 Debt/bond payments
 Expenses or revenue not recorded in
account structure
 Large transfers between organizations
 Can be material to the financial results of an
organization
 Entries usually vary from year to year
 Since activity varies greatly, even spread or
spread based on last year probably not viable
for CBIG budgeting
August, 2010
38
Academic Planning and Budget
Adjustments to the Unexpended Balance
2009/10 Budget Vs Actual Results
Y-T-D(Jun)
Carryforward
Adjustments to Unexp. Bal.
August, 2010
Approved Budget
Actual
Variance $
Variance %
217,920
(62,195)
217,920
(93,213)
0
(31,018)
0%
(50%)
39
Academic Planning and Budget
Adjustments to the Unexpended Balance
What does the ledger look like?
Carryforward =
$217,920
Total of adjustments = $93,213
Break apart carryforward and adjustments as two
separate entries in CBIG.
August, 2010
40
Academic Planning and Budget
Other Financial Activity
 All other costs may be good candidates for even spread
 If you get salaries, benefits, fee remissions, adjustments
to unexpended balance, major equipment purchases
correct you have assured most of budget is sound.
 Make sure to reduce appropriate costs for 5% budget
reduction
 Carefully consider sales and service funds. Revenue may be
lower due to volume reductions (volume sensitivity due to
economic conditions)
August, 2010
41
Academic Planning and Budget
Fund Swaps
 Occur at year-end at the discretion of APB or organizational
level units
 Used to align 19900 needs (or other available resources) with
other funding sources
 Not predictable
 Since swaps occur at year-end, does not currently impact midyear variance reporting
 When year-end variance reporting starts, variance explanation
is simple: “A fund swap occurred” and state which fund
sources in your organization are involved
August, 2010
42
Academic Planning and Budget
Contracts and Grants
 Budgeted in total in CBIG
 Important to project overhead recovery
 Estimate increase in total revenue realized on ledger
 % increase over previous year
 Utilize spread based on last year
 Some units budget based on “what you spend equals revenue”
 Not accurate approach to budgeting contracts and grants
 Recall we are trying to “predict the ledger”
 Most likely will be budgeting a June, 2010 surplus in
contracts and grants
August, 2010
43
Academic Planning and Budget
Gift and Endowments
 Budgeted in total in CBIG
 Need to estimate how much more or less in fund
transfers from Foundation will be used in 2009/10
 Utilize spread based on last year
 Review gift/endowment funds for untapped
opportunities
 Campuswide surpluses in unused gift/endowment funds
 Review restrictions on funds
August, 2010
44
Academic Planning and Budget
Budgeting in a “Down Cycle”





Make sure to account for budget reductions.
Rebalancing: 2009/10 saw a reprieve in the planned
utility/maintenance rebalancing recharges. Need to budget
rebalancing utility/maintenance for 2010/11.
Wage reductions in July-August (non-represented) and JulyDecember (represented)
Concentrate on wages, benefits, fee remissions, adjustments to
unexpended balances, large equipment purchases
Be very careful using spread based on last year
 Don’t assume the spread is correct even though you’ve
“pushed the button”
 Make sure to check your final budget for reasonability
August, 2010
45
Academic Planning and Budget
Reminders

Make sure to take into account one-time or temporary-continuing
allocations in funding and expenses
 Could be from Chancellor, Vice Chancellor, Dean, or Department
Chair
 Notations in CBIG may be useful to track this type of financial
activity

Budget for new funding sources
 New Differential Fee Funds
 New Course Material Fees
 Include any new funding source already established on the ledger
August, 2010
46
Academic Planning and Budget
Reminders


Ledger data is being loaded into CBIG on a monthly basis. If you want
to use the CBIG reports on a monthly basis, create your budget on a
monthly basis. (Quarterly is required.)
CBIG reports have two orientations: vertical and horizontal
Let’s look at what you can see on a 12-month
CBIG variance reports by looking at it with two
different perspectives.
August, 2010
47
Academic Planning and Budget
Variance Analysis: Materiality
 Basis for Variance: Total modified funds, Ending Balance at
organization level, 5% or $250K
 We want high level explanations
 Don’t explain small variances. Pick the large variances and
provide substantive reasons (by department, by project, etc.)
 Common explanations:
 “Budget will catch up by the end of the year” (timing) hasn’t been
true for many organizations
 “We budgeted incorrectly” should be becoming less frequent
 “We pressed the spread button” translates to the creator not
reviewing the budget before submission
 Please help us avoid rigorous, by-organization review by
Pricewaterhouse Coopers
August, 2010
48
Academic Planning and Budget
Budget to Actual Variance Analysis
(Horizontal)
School QQ: GENERAL FUNDS (19900)
Y-T-D(Jun)
General Fund Source
Sub-Total Appropriated
Actual
Variance $
28,465,202
27,546,385
(918,817)
Variance %
(3%)
28,465,202
27,546,385
(918,817)
(3%)
28,465,202
27,546,385
(918,817)
(3%)
Faculty Ladder
9,092,327
9,491,222
(398,895)
(4%)
Faculty Temporary
1,733,912
1,577,469
156,443
9%
980,774
1,112,450
(131,675)
(13%)
Academic Other
1,201,879
1,308,097
(106,218)
(9%)
Career Staff
7,875,805
293,002
7,334,782
227,797
541,023
65,205
7%
22%
21,177,699
21,051,816
125,883
1%
4,606,937
840,376
3,938,761
52,651
668,176
787,725
15%
94%
27%
Total Revenues
Academic Apprentice
Non-Career Staff
Total Salaries & Wages
Benefits
Fee Remissions
Total Benefits
Total Compensation
Material and Supplies - General
5,447,313
3,991,413
1,455,900
26,625,012
25,043,228
1,581,784
6%
238,885
91,643
147,242
62%
3,903
3,500
403
10%
Communications
220,600
251,908
(31,308)
(14%)
Travel and Entertainment
109,627
121,628
(12,002)
(11%)
Services
694,094
1,236,702
(542,609)
(78%)
Consultants/Temp. Services
412,431
77,606
334,825
81%
Information Technology
127,052
110,348
16,705
13%
33,935
76,257
(42,322)
(125%)
434,633
51,153
383,480
88%
3,000
0
3,000
100%
500
1,052
(552)
(110%)
0
0
0
0
0
0
0%
0%
Material and Supplies - Scientific
Equipment (non computer)
Operation and Maintenance of Space
Student Support - Underg & Grad
Other Expense - Control
Reserves for Auxiliaries
Indirect Cost Recovery
Total Operating Expenses
Total Compensation and Operating
Recharges
Total Expenditures
Surplus/(Deficit)
Carryforward (Approp.)
Ending Balance
August, 2010
Approved Budget
49
2,278,658
2,021,797
256,861
11%
28,903,670
0
27,065,025
0
1,838,645
0
6%
0%
28,903,670
27,065,025
1,838,645
6%
(438,468)
679,956
481,360
679,956
919,828
0
210%
0%
241,487
1,161,316
919,828
381%
Academic Planning and Budget
Variance Analysis: Revenue
(Horizontal)
Y-T-D(Jun)
General Fund Source
Approved Budget
Actual
Variance $
Variance %
28,465,202
27,546,385
(918,817)
(3%)
 Temporary budget reduction accounts for approximately $250K
of variance
 Remaining variance due to overestimation of revenue by four
departments
August, 2010
50
Academic Planning and Budget
Variance Analysis
Benefits and Fee Remissions
(Horizontal)
Y-T-D(Jun)
Total Salaries & Wages
Benefits
Fee Remissions
Approved Budget
Actual
Variance $
Variance %
21,177,699
21,051,816
125,883
1%
4,606,937
840,376
3,938,761
52,651
668,176
787,725
15%
94%
 Benefits budgeted at 21.8% of salaries. Actual was 18.7%.
 Note that salaries were budgeted almost exactly correctly
 Fee remissions were not budget properly to reflect full
reimbursement from central resources
 Note that there is an expense balance of $52,651
August, 2010
51
Academic Planning and Budget
Variance Analysis
Operating Expenses
(Horizontal)
Y-T-D(Jun)
Approved Budget
Actual
Variance $
Variance %
Material and Supplies - General
238,885
91,643
147,242
62%
Services
694,094
1,236,702
(542,609)
(78%)
Consultants/Temp. Services
412,431
77,606
334,825
81%
Operation and Maintenance of Space
434,633
51,153
383,480
88%



Most of budget reduction was taken by reducing supplies expense. This accounts for the
entire amount of the Materials and Supplies variance.
Costs for two projects in Department XYZ and Department ABC were budgeted in services
when the costs really occurred with consultants. Another project in the QRS Department
ran over budget by $200K.
Operation and Maintenance of Space: Variance is entirely in the Dean’s Office due to a plan
that was cancelled due to budget constraints
August, 2010
52
Academic Planning and Budget
Vertical Perspective: How much money do I have left?
Y-T-D(Jun)
General Fund Source
Sub-Total Appropriated
Actual
Variance $
28,465,202
27,546,385
(918,817)
Variance %
(3%)
28,465,202
27,546,385
(918,817)
(3%)
28,465,202
27,546,385
(918,817)
(3%)
Faculty Ladder
9,092,327
9,491,222
(398,895)
(4%)
Faculty Temporary
1,733,912
1,577,469
156,443
9%
980,774
1,112,450
(131,675)
(13%)
Academic Other
1,201,879
1,308,097
(106,218)
(9%)
Career Staff
7,875,805
293,002
7,334,782
227,797
541,023
65,205
7%
22%
21,177,699
21,051,816
125,883
1%
4,606,937
840,376
3,938,761
52,651
668,176
787,725
15%
94%
27%
Total Revenues
Academic Apprentice
Non-Career Staff
Total Salaries & Wages
Benefits
Fee Remissions
Total Benefits
Total Compensation
Material and Supplies - General
5,447,313
3,991,413
1,455,900
26,625,012
25,043,228
1,581,784
6%
238,885
91,643
147,242
62%
3,903
3,500
403
10%
Communications
220,600
251,908
(31,308)
(14%)
Travel and Entertainment
109,627
121,628
(12,002)
(11%)
Services
694,094
1,236,702
(542,609)
(78%)
Consultants/Temp. Services
412,431
77,606
334,825
81%
Information Technology
127,052
110,348
16,705
13%
33,935
76,257
(42,322)
(125%)
434,633
51,153
383,480
88%
3,000
0
3,000
100%
500
1,052
(552)
(110%)
0
0
0
0
0
0
0%
0%
Material and Supplies - Scientific
Equipment (non computer)
Operation and Maintenance of Space
Student Support - Underg & Grad
Other Expense - Control
Reserves for Auxiliaries
Indirect Cost Recovery
Total Operating Expenses
Total Compensation and Operating
Recharges
Total Expenditures
Surplus/(Deficit)
Carryforward (Approp.)
Ending Balance
August, 2010
Approved Budget
53
2,278,658
2,021,797
256,861
11%
28,903,670
0
27,065,025
0
1,838,645
0
6%
0%
28,903,670
27,065,025
1,838,645
6%
(438,468)
679,956
481,360
679,956
919,828
0
210%
0%
241,487
1,161,316
919,828
381%
Academic Planning and Budget
Any final questions?
August, 2010
54
Academic Planning and Budget