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  • 1. Business Analysis – UITS 11/20/2008 BUSINESS ANALYSIS Business Requirements Document University of Arizona BUDGETS Version 1.1 Page 1 of 54
  • 2. Business Analysis – UITS 11/20/2008 Table of contents 1 PURPOSE OF THIS DOCUMENT.................................... 4 2 DOCUMENT MANAGEMENT ......................................... 4 2.1 Contributors ......................................................................................................4 2.2 Version Control ................................................................................................5 3 Budget Process Overview..................................................... 6 3.1 Background.......................................................................................................6 3.2 Objectives .........................................................................................................6 3.3 Budgets/Accounts Overview ............................................................................7 3.4 Budget Definitions..........................................................................................12 3.5 Financial Records System (FRS)....................................................................14 3.6 Personal Services Operating System (PSOS).................................................16 4 The Budgets ......................................................................... 16 4.1 Operating Budget............................................................................................16 4.2 Sponsored Projects .........................................................................................24 4.3 Agency Accounts............................................................................................28 4.4 Scholarship Accounts .....................................................................................29 4.5 Plant Budget ...................................................................................................33 4.6 Auxiliary Budgets...........................................................................................35 5 Managing the Budgets ........................................................ 38 5.1 The Budget Office ..........................................................................................38 5.2 Systems Control..............................................................................................38 5.3 Sponsored Projects Services...........................................................................38 5.4 Budgeted Departments ...................................................................................40 5.5 Arizona State Legislature ...............................................................................40 5.6 Arizona Board of Regents (ABOR)................................................................40 5.7 Strategic Planning and Budget Advisory Committee (SPBAC) ....................41 6 Modifying the Budgets ....................................................... 41 6.1 Request for Budget Change............................................................................41 6.2 Personnel Action Form...................................................................................44 6.3 Position Control Form ....................................................................................45 Version 1.1 Page 2 of 54
  • 3. Business Analysis – UITS 11/20/2008 6.4 Automatic Budget Reallocation......................................................................45 6.5 Automatic Budget Calculation .......................................................................48 7 Budget Reporting................................................................ 48 8 Business Rule Summary..................................................... 49 9 ACRONYMS ....................................................................... 52 Version 1.1 Page 3 of 54
  • 4. Business Analysis – UITS 11/20/2008 1 PURPOSE OF THIS DOCUMENT The purpose of this document is to provide business analysis of current processes and procedures of Budgeting that may be used to drive future improvements to those processes and procedures. 2 DOCUMENT MANAGEMENT 2.1 Contributors Role Department Name Owner UITS PMO Rod Johnson Project Manager HR/FSO HRAA Team Contributor Budget Office Jim Florian Contributor Budget Office Ravi Bhat Contributor UITS Matt Shimel Contributor UITS Mike Lee Contributor UITS John Wilson Contributor Systems Control Pris Cantu Contributor Budget Office Kathy Whisman Contributor Financial Aid Gail Nazarenko Contributor Financial Aid LaJeana Hall Contributor FSO-Financial Mgt. Cindy Robison Contributor Sponsored Projects Lori Schultz Contributor Sponsored Projects Paul Sandoval Version 1.1 Page 4 of 54
  • 5. Business Analysis – UITS 11/20/2008 2.2 Version Control Date Version Author Sections Amendment 09/25/08 1.0 Rod Johnson All Final 09/29/08 1.1 Rod Johnson 3,4,5 Final Version 1.1 Page 5 of 54
  • 6. Business Analysis – UITS 11/20/2008 3 Budget Process Overview 3.1 Background The current system used to create the budget was installed in 1979 as a package purchased from Integral Systems. In addition the Financial Records System (FRS) was installed 1988. Analysis is needed to capture the current University of Arizona’s budget processes and requirements in order to provide a building block on which to base decisions and guidance for the next generation of budget systems. 3.2 Objectives Provide position control and budgeting stakeholders with an analysis of current processes and requirements. This document should function as a baseline for the following:  To provide a foundation of system functionality in order to request information from vendors.  To provide an overview of system functionality and business requirements to support the implementation of a COTS (commercial off the shelf) replacement of all or part of the current position control and budget system.  The creation of business requirements specifications for in house efforts in upgrading or replacing the current position control and budget system. Version 1.1 Page 6 of 54
  • 7. Business Analysis – UITS 11/20/2008 3.3 Budgets/Accounts Overview The University of Arizona’s definition of a budget is “to plan the expenditure of resources in advance with the flexibility to adjust as the result of new information”. A budget may have multiple funding sources. Those sources may designate the funds as restricted or non-restricted. Restricted funds are designated for a specific purpose. Non-restricted funds may be used as needed and must only adhere to general rules. Major fund groups are as follows:  State Appropriated  Auxiliary  Designated  Sponsored Projects  Other Restricted  Loans  Endowment  Plant  Agency  Audit Adjustments Account Styles:  Budget Style Account - Accounts for which budget authorization is provided for a funding period. These accounts must have budget available before expenditure can be made. Depending on the source and type of funding, unexpended balances may revert to the budgetary authority at the end of the budget period. Budget style accounts operate on one of the established Automatic Budget Reallocation (ABR) rules (see section 6.4).  Cash Style Account: Accounts that monitor cash availability rather than budget availability. These accounts generally must have cash available before expenditure can be made. Cash style accounts usually operate on the Automatic Budget Calculation (ABC) procedure (see section 6.5). Available cash balances at the end of a fiscal year generally roll over to the next fiscal year. Version 1.1 Page 7 of 54
  • 8. Business Analysis – UITS 11/20/2008 The following diagram depicts the budgets and accounts in use by the University. A budget is created wherever budget style accounting is used. The University receives funding from various sources, most of which is specified for certain types of expenditures. To comply with accounting and reporting requirements accounts are classified into fund. These funds are described in the following paragraphs. Current Operating Funds Current operating funds are resources currently expendable by the University in direct support of its primary objectives. The current operating funds may be either unrestricted or restricted. Resources available for all purposes of the University; at the discretion of the Board of Regents, are classified as unrestricted current operating funds. This group is further classified as state, designated and auxiliary funds. Resources that are restricted for a specific purpose by persons or organizations outside the University are classified as restricted current operating funds. This group is further classified as sponsored project grants and contracts and other restricted funds. a) State Funds: Unrestricted current operating funds not classified as designated or auxiliary funds. These funds primarily consist of tuition and fee revenue and State appropriations for main campus, College of Medicine, agricultural, and UA South operations. State funds are used to support the academic programs and the general operating expenses of the University. A State appropriation may specify the general purpose or purposes for which the appropriation may be used, and, if the Board of Regents can effect a change in the intended use of the funds, without having to go through a legislative process, then the funds are general operating funds. The Board of Regents may delegate Version 1.1 Page 8 of 54
  • 9. Business Analysis – UITS 11/20/2008 authority to make changes in the intended use of these funds to administrative units within the University. b) Designated Funds: Current operating funds that have been limited for a specific purpose by specific action of the Board of Regents or by an administrative unit of the University authorized by the Board to designate funds. The designated funds account for the activities of: locally allocated funds such as indirect cost recoveries, administrative service charge recoveries, investment income, and locally retained tuition; conferences; and certain instructional activities such as the summer session, continuing education, international, and extension programs which have been designated for a specific purpose. Also included are funds received from the sale of products or services that are not more appropriately classified as auxiliary enterprises according to the definition below. For example, sales of by-products of instructional, research, or public service activities, such as the sale of produce by the College of Agriculture, or the sale of hearing aids by the Speech and Hearing Science Department, are accounted for as designated funds. c) Auxiliary Enterprise Funds: Auxiliary enterprise funds are those current operating funds, which generate revenue from an established auxiliary enterprise. An auxiliary enterprise is a separately organized University unit or activity established to sell products or services on a continuing basis and is managed essentially as a self-supporting business. The auxiliary enterprises generally support the instructional, research, or public service activities of the University. An auxiliary enterprise charges fees directly related to, although not necessarily equal to, the cost of the products or services. Sales of by-products of instructional, research, or public service activities are not classified as auxiliary enterprises. See definition of designated funds. Examples of auxiliary enterprises include Residence Life, Intercollegiate Athletics, and Stores. d) Sponsored Project Grant and Contract Funds: Funds received from Federal, State or other governmental agencies or private organizations that are provided on a contractual or grant basis with the restriction that the funds be used for a specific purpose. These funds may only be used for the intended purpose and must be spent in accordance with terms specified in an agreement established between the sponsor and the University. If not, the funds may revert to the sponsor. e) Other Restricted Funds: Current operating funds received from outside sources with specific restrictions on how the monies are to be spent that are not more appropriately classified as sponsored projects. Included are restricted gifts, governmental grants for student aid, and private grants and scholarships. Non-operating Funds Non-operating funds are classified as loan, endowment, plant and agency funds. a) Loan Funds: Resources available to the University for loans to students in the financing of their education and the balance of existing loans outstanding. Loan funds may originate from restricted sources, such as gifts, endowment income Version 1.1 Page 9 of 54
  • 10. Business Analysis – UITS 11/20/2008 restricted to loans, and refundable grants matched with institutional funds. The Board of Regents or authorized University administrators may designate or transfer unrestricted funds to loan funds. Funds for loans may be specified for use in the National Direct Student Loan/Perkins program, temporary and long-term loan programs, or the health-related professions loan programs. b) Endowment Funds: Simply stated, an endowment is a special fund whereby the principal is held for investment and the interest earned on the principal is spent as directed by the donor c) Plant Funds: The unexpended plant funds, renewal and replacement funds, debt service funds, and the investment in plant funds together are called Plant Funds. I. Unexpended Plant Funds: Unexpended plant funds are resources and any associated indebtedness to be used for the acquisition of physical properties for institutional purposes, which have not yet been expended. Indebtedness incurred to finance plant acquisition, construction, and the like, are included as a liability of the unexpended plant funds, until the proceeds of the indebtedness are expended. Examples of restricted unexpended plant funds include proceeds from the issuance of long-term debt and gifts. Unrestricted unexpended plant funds include State capital or building renewal appropriations, as well as, funds set aside by the University from unrestricted fund balances. II. Renewal and Replacement Funds: Resources accumulated for renewal and replacement of the capital facilities of the University. III. Debt Service Funds: Accumulates resources for the payment of debt service charges and the retirement of long-term indebtedness. Examples of debt service funds include those for bonded indebtedness, Certificates of Participation, lease purchase agreements, and other forms of long-term indebtedness. IV. Investment in Plant Funds: Records the net capital acquisitions of the University. Capital assets are classified as land, buildings and improvements, infrastructure, equipment, library acquisitions, and construction in progress. The principal balance of liabilities incurred to acquire capital assets is recorded in this fund. d) Agency Funds: Agency funds are resources held by the University in a fiduciary capacity for organizations or entities not directly affiliated with the University, such as University Physicians, Inc. To enable the administrators of these funds to monitor and report on the activity of the funds, the accounting system must maintain separate records of each source of funds, and the expenditures from each source. This is accomplished by establishing separate accounts in the system, much as a bank establishes separate accounts for each depositor. An account is defined as a functional unit established for a specific purpose, with one individual having primary responsibility for its activity. Version 1.1 Page 10 of 54
  • 11. Business Analysis – UITS 11/20/2008 Three types of accounts are maintained in FRS: general ledger accounts, subsidiary ledger accounts and roll-up accounts. The general ledger (GL) accounts accumulate asset, liability, fund balance, fund addition and fund deduction records, also known as balance sheet records. The subsidiary ledger (SL) accounts accumulate budget, encumbrance, revenue and expenditure records. The roll-up accounts do not accumulate actual dollar records, but are used to provide summary reporting for a series of SL accounts. The following diagram shows a top down diagram of budgets from funding through financial records. Version 1.1 Page 11 of 54
  • 12. Business Analysis – UITS 11/20/2008 3.4 Budget Definitions The following is a list of commonly used terms regarding budgets, funding and accounts.  Budget – Planning the expenditure of resources in advance with the flexibility to adjust as the result of new information.  Base Budget – The base budget reflects the permanent allocation of state, locally allocated and technology research incentive funds (TRIF). It is used to plan expenditures for the next fiscal year and is updated during the course of the current fiscal year. This budget becomes the operating budget for the next fiscal year at budget rollover (July 1st). All permanent lines and associated employee positions are included and are expressed in Full Time Equivalency (FTE). Wages, allocations, and other operational expenses are reflected in pooled amounts. This budget is maintained by the PSOS system.  Operating Budget – This budget is used to plan the day to day operating expenses of the University for a period of one fiscal year. This budget is financed through State, locally allocated and ‘other’ funds and is commonly referred to as the PSOS budget or the temporary budget. All lines with temporary funding and associated employee positions are included. Wages, allocations, and other operational expenses are reflected in pooled amounts. This budget is maintained by the Personnel Services Operating System (PSOS) and FRS (Financial Records System) system.  Locally Allocated funds – A name given to the funds derived from indirect cost recoveries, administrative service charge recoveries, investment income and locally retained tuition. Locally allocated funds are a subset of Designated funds.  PSOS Budget – A name given to the state and locally allocated funded portion of the operating budget due to its maintenance by use of the PSOS software.  Original Budget – This is a snapshot of the Operating budget at the beginning of the Fiscal year (July 1st).  Auxiliary Budgets – These budgets are used by the Auxiliary units on a Fiscal year by year basis to plan for revenue and expenditures. A common budget shell is used for standardization. Administrative Service Charges (ASC) are included in these budgets as an expense. ASC are included as part of the locally allocated funds of the Operating Budget. Salary budget lines are reflected in the Operating Budget.  Sponsored Grants and Contracts – These budgets are used to plan expenditures of restricted funds designated for a specific purpose. These are not considered permanent funds. These budgets may or may not align with Fiscal year planning and can be multi year in duration. The SPINS system monitors these budgets. Version 1.1 Page 12 of 54
  • 13. Business Analysis – UITS 11/20/2008 Indirect Costs (IDC) are included in these budgets as an expense. IDC is included as part of the locally allocated funds of the Operating Budget.  Plant Budget – This budget is used for the planning of capital projects such as building construction.  Local Fund Budget – The budget reflecting Auxiliary, Designated and Restricted funds.  Scholarship budget – This budget is used for the planning the expenditure of scholarship monies.  Agency Accounts budget – These budgets are used to manage payroll expenditures and accounting information for units which are not part of the University.  All Funds Budget – A budget summary including all State and locally allocated restricted and unrestricted funds.  State Budget Request – Budget requests submitted to the state for the next fiscal year.  Appropriated Funds – Funds set aside by the state legislature and approved by the governor to accomplish the mission of the University. These funds may be unrestricted or restricted.  Non Appropriated Funds – All funds that are not appropriated and are used to augment appropriated funds. These funds may be unrestricted or restricted.  Designated Funds - The designated funds account for the activities of: locally allocated funds such as indirect cost recoveries, administrative service charge recoveries, investment income, and locally retained tuition; conferences; and certain instructional activities such as the summer session, continuing education, international, and extension programs which have been designated for a specific purpose. Included are funds received from the sale of products or services that are not more appropriately classified as auxiliary enterprises. For example, sales of by-products of instructional, research, or public service activities, such as the sale of produce by the College of Agriculture, or the sale of hearing aids by the Speech and Hearing Science Department, are accounted for as designated funds.  Auxiliary Enterprise Funds - Auxiliary enterprise funds are those current operating funds, which generate revenue from an established auxiliary enterprise. An auxiliary enterprise is a separately organized University unit or activity established to sell products or services on a continuing basis and is managed essentially as a self-supporting business. The auxiliary enterprises generally support the instructional, research, or public service activities of the University. An auxiliary enterprise charges fees directly related to, although not necessarily equal to, the cost of the products or services. Sales of by-products of instructional, research, or public service activities are not classified as auxiliary enterprises. See definition of designated funds. Examples of auxiliary enterprises include Residence Life, Intercollegiate Athletics, and Stores.  Restricted Funds - Current operating funds received from outside sources with specific restrictions on how the monies are to be spent that are not more Version 1.1 Page 13 of 54
  • 14. Business Analysis – UITS 11/20/2008 appropriately classified as sponsored projects. Included are restricted gifts, governmental grants for student aid, and private grants and scholarships.  Sponsored Project Grant and Contract Funds - Funds received from Federal, State or other governmental agencies or private organizations that are provided on a contractual or grant basis with the restriction that the funds be used for a specific purpose. These funds may only be used for the intended purpose and must be spent in accordance with terms specified in an agreement established between the sponsor and the University. If not, the funds may revert to the sponsor.  Budget Style Account: Accounts for which budget authorization is provided for a funding period. These accounts must have budget available before expenditure can be made. Depending on the source and type of funding, unexpended balances may revert to the budgetary authority at the end of the budget period. Budget style accounts operate on one of the established Automatic Budget Reallocation (ABR) rules.  Cash Style Account: Accounts that monitor cash availability rather than budget availability. These accounts generally must have cash available before expenditure can be made. Cash style accounts usually operate on the Automatic Budget Calculation (ABC) procedure. Available cash balances at the end of a fiscal year generally roll over to the next fiscal year. 3.5 Financial Records System (FRS) The Financial Records System (FRS) is used to capture and maintain subsidiary and general ledger entries. Budget information can be entered directly into FRS or automatically passed from other systems such as PSOS or SPINS. GL/SL Relationships Each subsidiary ledger (SL) account is identified with a general ledger (GL) account through use of an attribute known as the map code. This map code establishes a relationship between the SL and GL account that is the basis for indirect updates that are generated automatically in FRS. For example, when revenues are posted in the subsidiary ledgers, FRS automatically increases the cash balance and the fund balance of the appropriate general ledger account. When expenditures are posted in the subsidiary ledgers, FRS automatically decreases the cash balance and fund balance of the appropriate general ledger account. The map code is the last five digits of the GL account. There are three possible types of GL/SL relationships. 1) One GL to One SL: In this relationship, the cash balance and fund balance in the GL account are updated by a single SL account. This relationship may be established for auxiliary, designated and sponsored projects accounts. The managers of these accounts often need to know how revenues and expenditures affect the financial position of the account. Although these accounts will generally be budgeted, they must also have sufficient cash balance to cover an expenditure before that expenditure may be made. A one GL to one SL relationship usually exists if the last five digits of the GL account are the same as the first five digits of Version 1.1 Page 14 of 54
  • 15. Business Analysis – UITS 11/20/2008 the SL account. Also, the GL and the SL accounts usually have the same account name. 2) One GL to Many SL: The one GL to many SL relationship is generally established for accounts that receive budget authorization, but do not "own" balances. In other words, unexpended balances revert back to fund balance at fiscal year end and may be re-budgeted during the subsequent fiscal year as approved by the Arizona Board of Regents. In this relationship, several SL accounts update the same GL account. This structure is useful when the cash balance must be monitored at a higher level. This relationship is established for state-main campus and state-medical college accounts, as well as for some of the auxiliary, designated and other accounts. Expenditures may only be incurred if budget is available in the SL account. 3) One GL to No SL: The one GL to no SL relationship is established for accounts which do not record revenues and expenditures. These accounts, which are primarily handled within the Financial Services Office, include endowments and most loan accounts. Version 1.1 Page 15 of 54
  • 16. Business Analysis – UITS 11/20/2008 3.6 Personal Services Operating System (PSOS) The Personnel Services Operating System (PSOS) was implemented in 1982 to capture, record and store employee, affiliate, and associate information. Systems Control uses PSOS to maintain and query operating budget information that includes employee positions and other state and locally allocated budget accounts. The following diagram depicts how PSOS data screens are grouped: PSOS is also used to create a hardcopy printout of the state operating budget. 4 The Budgets 4.1 Operating Budget The operating budget is used for the planning of operational expenditures of state and locally allocated monies for a fiscal year. It reflects all accounts except those for plant (capital) funds and endowments. Line items within the budget are designated as permanent or temporary and contain positions, wages, allocations, full time equivalencies and pooled amounts for operational support expenditures such as travel and consumables. The following diagram depicts an overview of the operating budget: Version 1.1 Page 16 of 54
  • 17. Business Analysis – UITS 11/20/2008 Systems Control, through use of the PSOS system, maintains the subset of the operational budget that contains personnel lines and operational accounts that are state or locally funded. The Budget Office manages the budget at a higher level. The Operating Budget displays permanent employee and wage and allocation pool lines for all operating funds; however, actual budget is only maintained in PSOS for State and locally allocated (designated) accounts. All other accounts have budget loaded or cash posted directly in FRS. Employee related expense (ERE) budget initially resides in institutional pool accounts for State and most locally allocated accounts. An FRS program periodically moves budget from the pools directly to the accounts to cover the ERE costs. The Budget Book is distributed at the beginning of the fiscal year. This permanent base budget is revised throughout the year using a Request for Budget Change. In April, worksheets are distributed to departments, campus wide, for review and are used as a tool to appropriately adjust budget for the upcoming fiscal year. Any changes made will be reflected in the final worksheets distributed in July. Version 1.1 Page 17 of 54
  • 18. Business Analysis – UITS 11/20/2008 The Budget Office maintains an EXCEL application used to analyze the impact of future funding forecasts on the operating budget. The operating budget is based on the fiscal year of July 1st to June 30th. The budget is ‘rolled over’ from one year to the next. The graph on the following page depicts the fiscal year rollover. The budgets depicted in the above diagram are as follows:  Temporary Budget This is the budget that is used from the beginning to the end of the Fiscal year. It starts out identical to the Base Budget but is modified throughout the year as needed through RBC (request for budget change) and other adjustments.  Base Budget This is the budget which is modified during the Fiscal year with permanent budget changes that becomes the temporary budget for the next Fiscal year.  Original Budget Version 1.1 Page 18 of 54
  • 19. Business Analysis – UITS 11/20/2008  This is a snapshot of the operating budget at the beginning of the fiscal year (July 1st).  The Original, Base, and Temporary Budgets are identical at Fiscal Year start. All budget overages and shortages reflected in the operational budget at year end generally revert back to the original accounts in next year’s operational budget as part of the fiscal year rollover process. Position Control Employee expenses are planned and recorded in the operating budget which includes position information managed by the position control system. Position control was initially installed and used as the basis for the planned method of distributing Federal funds. The Position Control System was purchased at the same time (1978) and from the same vendor as the Payroll system. A position at the University is defined as a grouping of one to five titles, associated job codes, funding accounts and other pay and non-pay related data assigned to a single position control number. The position control data defines the position type and the department that owns the position. The department is also known as the roster department because all hours worked for the position will be recorded by the position owner. The position control number (PCN) is the key that links the operating budget, the position, and the employee database including the name of the person filling the position. An employee can have up to 4 funding accounts per position. For example if a unit has two budgeted department numbers, two positions per employee can be established which will allow up to eight account numbers. If a unit has one budgeted department number, the unit is limited to four accounts. Hiring departments provide a position number and title on the hiring and appointment form (HAF) or Personnel Action Form (PAF). If a position does not exist at the time of hire a new one will be assigned. Funding source (s), dates of employment, funding for the period of hire and a list of employees who have occupied the position are attributes of the position. The position control form (PCF) is used to change the source of funding/accounts for positions with current incumbents. Paid positions are required to have at least one source of funding. The current limit is four funding sources per position which is not adequate. Current estimated requirements are a maximum of 15 funding sources per position. Supplemental compensation positions are independent of and in addition to an employee’s regular position and have different titles and attributes for faculty, classified staff, or GA (Graduate Assistant). The PCN should belong to the department paying the supplemental compensation. Positions are expressed in FTE. A full time position is 1.00 FTE, 40 hours per week or 80 hours per pay period. A half time position is 0.50 FTE, 20 hours per week, 40 hours per pay period. For salary employees, the FTE sets the maximum number of Version 1.1 Page 19 of 54
  • 20. Business Analysis – UITS 11/20/2008 hours that can be worked in the pay period. For wage employees, the FTE does not restrict the number of workable hours as long as the hours do not exceed 40 in a one- week period. The following diagram depicts the link between position data to budget and employee data: The arrows in the above diagram show the key links between the current data stores for position, budget, and employee data. Not all non-key data fields are represented in this diagram. That information can be found in the respective data file copybooks. Version 1.1 Page 20 of 54
  • 21. Business Analysis – UITS 11/20/2008 Systems Control uses PSOS to maintain and query operating budget information that relates to employee positions. The following diagram shows the PSOS menus that are used: Budgeted departments manage budget lines by submitting the following forms to Systems Control:  RBC (request for budget change)  PAF (Personnel Action Form)  PCF (Position Control Form) Examples of these forms can be seen in Section 6. The diagram on the following page depicts a view of the operating budget. Version 1.1 Page 21 of 54
  • 22. Business Analysis – UITS 11/20/2008 Example of Operating Budget Version 1.1 Page 22 of 54
  • 23. Business Analysis – UITS 11/20/2008 The following are general requirements for the operating budget. The ability to:  Provide security and accessibility in accordance with University defined policies and procedures.  Provide real time additions, updates, deletions and queries to any and all of the data.  Backup data in accordance with University defined policies and procedures.  Restore data in accordance with University defined policies and procedures.  Easily apply modifications to system based on future requirements.  Display permanent base budget and current operating budget by account, department, and position.  Display original budget, current operating budget, actual revenues and expenditures, encumbrances, and balances available fiscal year to date.  Display employee related expenditures and encumbrances fiscal year to date.  Capture and update the attributes of the organizational hierarchy.  Display and report the operating budget by various consolidations of the organizational hierarchy.  Display and report the operating budget consolidated by various types of expenditures.  Display and report the original, permanent, and current operating budget by WICHE program (i.e., Instruction, Organized Research, Public Service, Academic Support, Student Services, Institutional Support, Auxiliary).  Display and report the original, permanent, and current operating budget by fund type (i.e., State, Designated, Restricted, Other Restricted, Auxiliary).  Capture and display Full-Time-Equivalent (FTE) by position, account and department.  Modify original budget, perm base budget, current operating budget, position funding, and FTE.  Track changes made to perm base budget, current operating budget, position funding, and FTE.  Produce the annual State Operating Budget.  Produce the annual State Operating Budget Request.  Produce ad hoc reports. Version 1.1 Page 23 of 54
  • 24. Business Analysis – UITS 11/20/2008 4.2 Sponsored Projects Sponsored Projects Services is a unit of the Office of the Vice President for Research, Graduate Studies, and Economic Development. Its mission is contract and grant administration for research projects. The following diagrams present overviews of sponsored projects pre-award and post- award processes. Version 1.1 Page 24 of 54
  • 25. Business Analysis – UITS 11/20/2008 Sponsored projects can vary from less than one year to multi-year. Indirect cost recover is used to capture administrative overhead and it is included in the University’s Operating Budget. Each account in FRS is assigned to a responsible person. For sponsored projects accounts, this person is the principle investigator. The principle investigator may delegate some of the duties associated with financial management of the account to a business manager or other subordinate. However, the principle investigator assumes full responsibility for all activity on the account. The principle investigator is responsible for ensuring that all disbursements from the account are:  for the bona fide purpose of the account;  allowable per the terms of the award  authorized in accordance with University policies, State and Federal laws and regulations;  charged to the appropriate object code; and Version 1.1 Page 25 of 54
  • 26. Business Analysis – UITS 11/20/2008  fall within the available funding for the account The following paragraphs describe sponsored project processes related to budgeting. Pre-award budgeting: Pre-award budgeting requirements vary from sponsor to sponsor with some requiring specific budget templates to be followed. Sponsored Projects pre-award staff reviews all budgets prior to submission to ensure that all entries fit into FRS categories. Setting up sponsored project accounts: The University considers the tight technical schedule that a principal investigator is under once a project is awarded and does its best to minimize the amount of time it takes to set up an account. Sponsored Projects Services is authorized to set up a spending account in the University financial system (FRS) after receiving a fully- signed proposal routing sheet, budget, and fully-signed original award document (e.g., purchase order, grant, contract). Backstopping: The University does not have formal authority to incur costs against a grant or contract until a fully-executed award document is in place. However, sometimes the award documents are late and the principal investigator needs to begin spending before the award document is fully-executed. When the award documents are late and the investigator knows that the University will accept the terms of the award, e.g., continuation awards or Federal grants, it is appropriate for the investigator to backstop the account. Backstopping is not appropriate if the University and sponsor have not completed negotiation of unacceptable terms of a contract. Backstopping is a guarantee that the department head will cover expenditures charged to the account in the event that the award does not come through. Pre-award Costs: Pre-award costs are those costs that a principal investigator may incur before the effective date of the project. Most sponsors require their approval before charging pre-award costs to the project. A provision for pre-award costs in the terms of the contract is the most acceptable documentation of sponsor approval. A letter from the contracting officer or grant officer approving pre-award costs is also acceptable. Many Federal grants are awarded under the terms of the Federal Demonstration Partnership (FDP). The terms of the FDP allow the University to incur costs up to 90 days before the effective date of the project. The costs to be incurred must be necessary for the conduct of the project and must be allowable under the potential award. The principal investigator assumes responsibility for covering the obligations and expenditures in the event that the award does not come through. Loading the FRS Account Budget: The approved award budget is the authority for the budget to be loaded to the FRS account. The breakout of budget categories in the FRS account must be identical to the award budget. The FRS budget will be changed only on the basis of written approval from the sponsor, such as a contract modification or letter. If the award Version 1.1 Page 26 of 54
  • 27. Business Analysis – UITS 11/20/2008 document does not include a budget page, the proposal budget will serve as the basis for loading the FRS budget. It is important to understand how the accounting system deals with the indirect cost category of the budget. The entire indirect cost budget is encumbered when the budget is loaded to the FRS spending account. The charge for indirect costs is calculated on a Modified Total Direct Cost base, i.e., the account is not charged indirect costs for capital and student support. Therefore, deviations in the spending pattern among cost categories affects the amount of indirect costs charged and must be considered when calculating the available balance. When re-budgeting capital to operations or personal services, consider that the indirect costs associated with the re-budgeted capital have not been encumbered but will be charged to the account nevertheless, and will reduce the available balance. The same is true, in reverse, when re-budgeting operations or personal services into capital. The indirect costs associated with the re-budgeted operations or personal services will not be charged on the capital, thus increasing the available balance in the account. The following are general requirements for the sponsored projects. The ability to:  Provide security and accessibility in accordance with University defined policies and procedures.  Provide real time additions, updates, deletions and queries to any and all of the data.  Backup data in accordance with University defined policies and procedures.  Restore data in accordance with University defined policies and procedures.  Easily apply modifications to system based on future requirements.  Electronically edit and upload pre-award budgets to FRS. Version 1.1 Page 27 of 54
  • 28. Business Analysis – UITS 11/20/2008 4.3 Agency Accounts Agency funds account for the resources held by the University (the Agent) for organizations or entities (the Principal) external to the University. The University must act with reasonable care in administering the funds of others. Funds are to be spent as directed by the external party unless such actions are contrary to the University's interests. With Agency funds, specific guidelines should be followed. Agency accounts are not budgeted. Guidelines for Agency Accounts: A memorandum from the external party should define the function of the account, the types of transactions allowed and any expense restrictions on the account. The memorandum must identify a University employee as the responsible person. A positive cash balance must be maintained at all times in the account. Since Agency funds do not belong to the University of Arizona, any fund balance belongs to the external entity. Periodic reports of transactions (additions and deductions) should be sent to the entity. Version 1.1 Page 28 of 54
  • 29. Business Analysis – UITS 11/20/2008 Some examples of agency accounts are:  Journals (academic and research)  Conferences  Pass through scholarships  Professional Associations  Benefit payment clearing account The following are general requirements for agency accounts. The ability to:  Provide security and accessibility in accordance with University defined policies and procedures.  Provide real time additions, updates, deletions and queries to any and all of the data.  Backup data in accordance with University defined policies and procedures.  Restore data in accordance with University defined policies and procedures.  Easily apply modifications to system based on future requirements. 4.4 Scholarship Accounts The University of Arizona provides access to a full range of federal, state, and privately donated financial aid funds to its students through the Office of Student Financial Aid (OSFA). Assistance is available to students based on financial need, academic merit, and program of study. The application process for financial aid begins with the completion of a need-based application for student financial aid. In some instances the University of Arizona Scholarship Application must be completed to apply for scholarships. Scholarships accounts are managed by the OSFA and used to apply and track funds for student scholarships. They are cash style accounts that cover all scholarships in force at the University. These accounts are tracked in the Financial Records System (FRS), Student Information System (SIS), and the MATRIX SAS module along with various departmental level ACCESS and EXCEL files. There are in excess of 2000 funding sources which fit into one of the following three categories:  Restricted – Fund usage is restricted by the donor (i.e. Federal Pell grant, Smart Grant, LEAP, private)  Institutional – Funded by institutional sources (i.e. QTR summer school, ABOR special programs, athletics) Version 1.1 Page 29 of 54
  • 30. Business Analysis – UITS 11/20/2008  Agency – Also known as pass through accounts. Funded by private sources (i.e. Hughes Employees, Kiwanis) Scholarship accounts do not have any links to the Operating Budget. The following depicts the flow of funds for scholarship accounts: OSFA creates budget shells for institutional and federally funded scholarships based on planned revenue. The budget office is responsible for loading the FRS scholarship accounts and reporting the allocation of dollars to financial aid. Scholarships funded by private donors are not budgeted. Version 1.1 Page 30 of 54
  • 31. Business Analysis – UITS 11/20/2008 The following is the format of the budget shell: Version 1.1 Page 31 of 54
  • 32. Business Analysis – UITS 11/20/2008 The following are general requirements for the scholarship accounts. The ability to:  Provide security and accessibility in accordance with University defined policies and procedures.  Backup data in accordance with University defined policies and procedures.  Restore data in accordance with University defined policies and procedures.  Easily apply modifications to system based on future requirements.  Load budgets for all scholarship accounts including scholarships funded by endowments.  Provide up to date online access to all account information.  Provide real time data synchronization between financial aid, student record and financial record computer applications.  Provide real time additions, updates, deletions and queries to any and all of the data. Version 1.1 Page 32 of 54
  • 33. Business Analysis – UITS 11/20/2008 4.5 Plant Budget The Plant Budget, also known as the Capital Budget, is used to plan for long term capital projects such as major additions and/or renovations to physical facilities. This includes planning for unexpended plant funds, renewal and replacement funds, debt service funds, and the investment in plant funds. Plant budgets are project to date with durations that can range from less than one year to multi-year. Version 1.1 Page 33 of 54
  • 34. Business Analysis – UITS 11/20/2008 The following diagram shows an example of the plant budget: The following are general requirements for the plant budget. The ability to:  Provide security and accessibility in accordance with University defined policies and procedures.  Provide real time additions, updates, deletions and queries to any and all of the data.  Backup data in accordance with University defined policies and procedures.  Restore data in accordance with University defined policies and procedures.  Easily apply modifications to system based on future requirements.  Display original budget and current plant budget.  Display actual revenue, transfers-in, expenditures, encumbrances, and balances available fiscal year to date and project to date.  Track and modify capital project attributes (i.e., funding sources, project number, accounts completion dates, and responsible parties).  Modify plant budget.  Track changes made to plant budget. Version 1.1 Page 34 of 54
  • 35. Business Analysis – UITS 11/20/2008  Display and report the plant budget consolidated by various types of expenditures.  Produce the Quarterly Capital Report.  Produce the annual Capital Improvement Plan.  Produce ad hoc reports. 4.6 Auxiliary Budgets An auxiliary unit is an accounting entity which exists to furnish goods or services to students, faculty, or staff and which charges a fee directly related to, although not necessarily equal to, the costs of the goods or services. The distinguishing characteristic of an auxiliary enterprise is that it is managed essentially as, and intended to be, a self-supporting activity. The auxiliary budget is used for planning revenue and expenditures for an auxiliary unit. A budget shell is used for standardization. Auxiliary units pay an Administrative Service Charge (ASC) which is included in the Operating Budget within locally allocated funds. The following page shows the format of the budget shell: Version 1.1 Page 35 of 54
  • 36. Business Analysis – UITS 11/20/2008 Budget Shell Version 1.1 Page 36 of 54
  • 37. Business Analysis – UITS 11/20/2008 The following are general requirements for the auxiliary budgets. The ability to:  Provide security and accessibility in accordance with University defined policies and procedures.  Provide real time additions, updates, deletions and queries to any and all of the data.  Backup data in accordance with University defined policies and procedures.  Restore data in accordance with University defined policies and procedures.  Easily apply modifications to system based on future requirements.  Display current operating budget by account, department, business unit and position.  Display original budget, current operating budget, actual revenues and expenditures, encumbrances, and balances available fiscal year to date.  Display employee related expenditures and encumbrances fiscal year to date.  Capture and update the attributes of the organizational hierarchy and business unit.  Input the projected budget for the next fiscal year.  Calculate projected fiscal year ending balance by business unit.  Display and report historical financial data by business unit.  Display and report the operating budget by various consolidations of business units and the organizational hierarchy.  Display and report the operating budget consolidated by various types of expenditures.  Track transfers-in and transfers-out from/to other funding units.  Modify original budget, and current operating budget.  Capture and display Full-Time-Equivalent (FTE) by position, account, department, and business unit.  Produce the annual Local Fund Budget report.  Produce the local fund portion of the State Operating Budget Request.  Produce ad hoc reports. Version 1.1 Page 37 of 54
  • 38. Business Analysis – UITS 11/20/2008 5 Managing the Budgets Budgets are managed through collaboration with numerous agencies and University departments as depicted in the following diagram: 5.1 The Budget Office The mission of the University of Arizona Budget Office is to effectively manage the budgetary resources of the University. The Budget Office is committed to providing efficient, timely and accurate budgetary and expenditure information to both internal and external constituents. They:  Are responsible for establishing budget and approving budget changes for local and state accounts.  Provide services for training, planning and problem resolution.  Provide information and analysis to support the central decision making and planning processes.  Work with internal constituents to guide the budgetary process.  Provide analysis and reporting as requested by external constituents.  Establish monitoring controls to ensure compliance with internal policies and external mandates. 5.2 Systems Control Systems Control is part of Business Affairs. They are caretakers for the University's Human Resources Information System and, in that capacity; they maintain system data that is used to:  Process all university personnel transactions affecting budget, funding, status, or personal information changes.  Produce the University's annual operating budget document.  Identify and develop procedures to streamline personnel and related budgetary paperwork.  Providing system and document training to help operating departments make maximum use of the information resource and to speed document processing. 5.3 Sponsored Projects Services Sponsored Projects Services (SPS) is a unit of the Office of the Vice President for Research, Graduate Studies, and Economic Development. Its mission is contract and grant administration for research projects. The structure of SPS is as follows: Version 1.1 Page 38 of 54
  • 39. Business Analysis – UITS 11/20/2008  Pre-Award - Proposal routing, review, and approval - Submission of proposals to sponsoring agency - Receipt, review, and negotiation of grants and contracts - Assignment of FRS account numbers for new grants and contracts - Provide authorization to Post-Award to set up accounts in FRS  Post-Award - Account monitoring from set-up to close-out - Compliance with Sponsor and University regulations, invoicing, aged accounts receivable, financial reporting, expense transfers, etc. - Assist principal investigator and department with account monitoring and resolution of accounting issues/problems  Cash Management - Monitors cash received on sponsored accounts - Identifies and posts receipts to the general ledgers - Letter of credit - Cost sharing certifications  Property Administration - Monitors capital purchases on sponsored accounts - Determines title and sponsor requirements - Submits property reports to sponsoring agencies - Follows up on delinquent principal investigator technical reports - Sponsors fund projects based on the professional expertise of the principal investigators submitting proposals; however, the formal award is made in the name of The University of Arizona. When the award is accepted, the principal investigator assumes the responsibility for conducting and completing the technical work and for administering the project according to the regulations of the sponsor, the University, and the State of Arizona. That is, the principal investigator is responsible and accountable for the sponsored project. The University provides the infrastructure within which the investigator conducts the project. Thus, the principal investigator and the University have a mutual interest in carrying out the project for which the funds are awarded. Version 1.1 Page 39 of 54
  • 40. Business Analysis – UITS 11/20/2008 5.4 Budgeted Departments Budgeted departments are created to accomplish a specific purpose. An administrative department may have more than one budgeted department. They manage the budget by budget line. They request changes to the operating budget via:  Request for Budget Change (RBC) - used to make funding changes. Submitted along with supporting documentation such as the PCF and/or PAF. There is currently an on-line RBC form.  Personnel Action Form (PAF) - is required for changes in salary or title; for granting promotion and tenure; and granting or returning individuals in appointed positions from sabbatical or leave without pay. If budget is affected, an RBC must accompany the PAF.  Position Control Form (PCF) - is required when there is a change in the funding split or source of a particular position. If budget is affected, an RBC must accompany the PCF. 5.5 Arizona State Legislature The source of funding for State accounts emanates from the State Legislature in the form of spending authority, which consists of an approved appropriation plus registration/tuition revenues. This spending authority is approved and reflected in an annual State House Bill with a line item for each area of funding, i.e. Main Campus, Agriculture, Arizona Health and Science Center (AHSC) and Arizona International Campus of the University of Arizona. In addition, because state dollars are funded by the State Legislature, certain statutes and policies have been established which rule how these monies may be spent. These rules will be addressed in section 6.4. 5.6 Arizona Board of Regents (ABOR) Each university will prepare a legislative budget request for ABOR review and approval before submission to the Governor and Legislature. The universities will develop these requests in accordance with guidelines developed cooperatively by the Central Office and the universities, and submit them on a schedule adopted by the Board. Following legislative appropriation and in support of the all-funds budget approved by ABOR, each university will prepare a detailed state operating budget, and make a copy available to the Central Office for informational purposes. 1. Detailed Local Fund Operating Budget In support of the all-funds budget approved by the Board, each university will prepare a detailed local fund operating budget, and make a copy available to the Central Office for informational purposes. 2. All-Funds Operating Budget Version 1.1 Page 40 of 54
  • 41. Business Analysis – UITS 11/20/2008 No later than September 1st of each year, each university will submit to the central office an all-funds budget allocation for consideration by the Board. These allocations should include estimated expenditures from the state general fund, unrestricted local funds, and restricted gifts, grants and contracts, and outline the estimated expenditures within at least the following programs: Instruction Student Services Research Institutional Support Public Service Scholarships/Fellowships Academic Support Auxiliary Enterprises 5.7 Strategic Planning and Budget Advisory Committee (SPBAC) In consultation and dialogue with the President, the Provost, and the University community, the Strategic Planning and Budget Advisory Committee (SPBAC) supports and enhances the success of the University through thoughtful and informed advice relating to: strategic planning, assessment of institutional priorities, review of budgetary policies, and the evaluation of programs and services. In partnership with the University, SPBAC:  Develops and disseminates the University's strategic plan.  Identifies issues that facilitate or impede the pursuit of the University's mission.  Provides advice on budget policies, significant budgetary actions, and institutional priorities consistent with the strategic plan of the University.  Evaluates the effectiveness of plans, policies, and assessments that affect the entire infrastructure of the University.  Develops guidelines for setting planning and budgeting priorities. 6 Modifying the Budgets Budgets are modified during the year by RBC (request for budget change). If these changes are position related they are supported by the PAF (Personnel Action Form) and/or the PCF (Position Control Form). 6.1 Request for Budget Change Request for budget changes (RBC’S) provide a method for requesting budget changes on State and Local accounts: Some examples may include: - To make a budget change affecting personal services or ERE in a state account. Version 1.1 Page 41 of 54
  • 42. Business Analysis – UITS 11/20/2008 - Transfer budget between pools in the same account. - Transfer budget between two or more accounts. NOTE: Budgets may not be transferred between state main campus, medical or agricultural accounts, or between state and local accounts, between state and sponsored project accounts, or between local and sponsored project accounts. - Revise current budgets. - Transfer cash between two or more general ledgers. RBC may not be used to transfer budget on Sponsored Project Accounts. The RBC is printed and forwarded to Systems Control for state accounts and the Budget Office for local and plant fund accounts. The RBC form is shown on the following page: Version 1.1 Page 42 of 54
  • 43. Business Analysis – UITS 11/20/2008 Version 1.1 Page 43 of 54
  • 44. Business Analysis – UITS 11/20/2008 6.2 Personnel Action Form A document generated by the Personal Services Operating System (PSOS) that contains detailed information about an employee and the funding for the employee's position. The PAF is shown below: Version 1.1 Page 44 of 54
  • 45. Business Analysis – UITS 11/20/2008 6.3 Position Control Form A document that contains all relevant information about the position, position control number, funding source (s), dates of employment, funding for the period of hire and a list of employees who have occupied the position. The PCF is shown below: 6.4 Automatic Budget Reallocation Automatic Budget Reallocation (ABR) is a method by which the Financial Records System (FRS) automatically transfers budget dollars from predefined budget pools to specific line items within the pool. This transfer is activated whenever a transaction is posted to a line item within a defined budget pool. The required budget is automatically transferred, or reallocated, to the line item. The purpose of ABR is to provide a means of monitoring budget balances available at significant levels of revenue or expense.  ABR pools The University has established several ABR pools for account use (Figure 1). These pools appear at various object code levels, may only be used for budgetary purposes, and cannot be used to record revenues, expenditures, or encumbrances. Version 1.1 Page 45 of 54
  • 46. Business Analysis – UITS 11/20/2008 Figure 1 - ABR Pools ABR Object Codes ABR Pool 0390 Sales & Service Revenues ABR Pool 1000 Personal Services ABR Pool 1100 Salaries ABR Pool 1300 Wages ABR Pool 2000 ERE ABR Pool 3000 Other Direct Costs ABR Pool 3100 Operations ABR Pool 5800 Resale Supplies ABR Pool 6000 Travel ABR Pool 6100 Travel-In ABR Pool 6200 Travel-Out ABR Pool 7000 Capital ABR Pool 7100 ##Hard Cost ABR Sub pool 7200 Soft Cost ABR Sub pool 7600 Furniture, Fixtures & Equipment ABR Sub pool 8000 Student Support ABR Pool 9997 Expense ABR - Budget Style 9998 Expense ABR - Cash Style  ABR Rules Different types of accounts have different budgetary requirements. Therefore, different ABR "rules" have been established in the system. Each rule establishes different levels of budget, using one or more of the budget pools. The rule defines which budget pools are used, and identifies the range of object codes that participate in each pool. Currently there are eight ABR rules in effect. These rules are listed in Figure 2 along with corresponding object code ranges. Figure 2 - ABR Rules Object Code Range Rule ABR Pools Start Stop Pool Description 0 ABR is not in effect Version 1.1 Page 46 of 54
  • 47. Business Analysis – UITS 11/20/2008 1 0390 0400 0749 Sales & Service Revenues 1000 1101 1999 Personal Services (Salaries & Wages) 2000 2001 2999 ERE 3000 3001 7999 Other Direct Costs 8001 9710 2 9998 1101 9710 Master Expense Pool-Cash Style 3 9997 1101 9710 Master Expense Pool-Budgeted 4 1000 1101 2999 Personal Services & ERE 3100 3101 5999 Operations 6000 6001 6999 Travel 7000 7001 7999 Capital 8000 8001 8999 Student Support 5 1000 1101 1999 Personal Services (Salaries & Wages) 2000 2001 2999 ERE 3000 3001 7999 Other Direct Costs 8001 9710 6 1300 1301 1999 Wages 3000 3001 8999 Other Direct Costs 7 7100 7250 7260 Construction, Renovation, Remodeling 7370 7390 Site Clear, Development, Parking, & Landscape 7410 7411 Site Utilities Extensions 7470 7471 Special Fixed Equipment 7200 7210 7240 A/E Fees, Consultant Fees, Design Fees 7270 7281 Construction/Renov/Remodeling/Support Svcs - FM 7320 7330 FDC Constr Mnmgt Svcs - FM Design/Inspection 7420 7421 Construction Manager 7440 7441 Other Construction Costs 7480 7481 State Risk Management Constr Insurance 7520 7540 A/E & C/M Reimbursable & Asbestos Abate 7920 7930 Mandatory & Voluntary Transfers 7600 7610 7830 Equipment & Library Acquisitions 7910 7911 Freight In/Out  Usage As a general rule, ABR Rule 1 is used for most budgeted local accounts; Rule 2 is used for cash style accounts; Rule 4 may be used for plant fund accounts or sponsored project accounts, depending on the restrictions imposed by the particular sponsor; and Rule 5 is generally used for other restricted accounts and loan accounts. Rule 6 is used for state accounts, certain budgeted local accounts that will be monitored similarly to state accounts, and other budget style accounts in which budgets for salaries and wages are maintained in separate pools to facilitate budget monitoring. Rule 7 is used for Plant Fund Budget style construction project accounts with budgets of $1,000,000 or more (which require ABOR approval) and consists of construction expense budget pools and specific object code line item budgets. To determine which rule is used for a particular account refer to FRS screen 09X, SL Account Inquiry, or contact Version 1.1 Page 47 of 54
  • 48. Business Analysis – UITS 11/20/2008 your fund accountant. Rule 3 provides for a single budget to be loaded, rather than loading budgets at the category level, and has limited use at this time. 6.5 Automatic Budget Calculation "Cash style" accounts (ABR Rule 2) operate like a checking account. Budgets are not loaded and expenditures are only allowed if there is cash available to spend. Cash is a General Ledger (GL) item and is not reflected on Subsidiary Ledger (SL) accounts. Therefore, an Automatic Budget Calculation (ABC) program is run weekly on cash- style accounts to derive a new expenditure budget figure for cash- style accounts. When the ABC program is run, a budget transfer to object code 9998 is created, and revenue budgets are loaded equal to the total amount of revenues received since the last ABC program run, resulting in a revenue budget balance available of zero. 7 Budget Reporting The following is a list of internal and external budget reports. External Report Source Local Funds Budget MS Access program State Operating Budget Request MS Access Program State Operating Budget PSOS State Expenditure Authority Excel Expenditure Limitation Report Excel Initial All Funds Report Excel Mid-Year All Funds Update Excel FTE Usage Report Excel Vacant FTE Report Excel Ad Hoc Reports Various Internal Report Source Local Fund Budget Variance Report Excel Perm Base Funding Report Excel Version 1.1 Page 48 of 54
  • 49. Business Analysis – UITS 11/20/2008 Expenditure Funding Summary MS Access Responsibility Rollup Report MS Access RBC Online Budget Office Application All Funds Operating Summary Excel Ad Hoc Reports Various 8 Business Rule Summary The following business rules are necessary for budgets to operate correctly for the University of Arizona. These rules include what is currently in use and requirements for the near term. The following are general requirements for the operating budget. The ability to:  Provide security and accessibility in accordance with University defined policies and procedures.  Provide real time additions, updates, deletions and queries to any and all of the data.  Backup data in accordance with University defined policies and procedures.  Restore data in accordance with University defined policies and procedures.  Easily apply modifications to system based on future requirements.  Display permanent base budget and current operating budget by account, department, and position.  Display original budget, current operating budget, actual revenues and expenditures, encumbrances, and balances available fiscal year to date.  Display employee related expenditures and encumbrances fiscal year to date.  Capture and update the attributes of the organizational hierarchy.  Display and report the operating budget by various consolidations of the organizational hierarchy.  Display and report the operating budget consolidated by various types of expenditures.  Display and report the original, permanent, and current operating budget by WICHE program (i.e., Instruction, Organized Research, Public Service, Academic Support, Student Services, Institutional Support, Auxiliary).  Display and report the original, permanent, and current operating budget by fund type (i.e., State, Designated, Restricted, Other Restricted, Auxiliary).  Capture and display Full-Time-Equivalent (FTE) by position, account and department. Version 1.1 Page 49 of 54
  • 50. Business Analysis – UITS 11/20/2008  Modify original budget, perm base budget, current operating budget, position funding, and FTE.  Track changes made to perm base budget, current operating budget, position funding, and FTE.  Produce the annual State Operating Budget.  Produce the annual State Operating Budget Request.  Produce ad hoc reports. The following are general requirements for the sponsored projects. The ability to:  Provide security and accessibility in accordance with University defined policies and procedures.  Provide real time additions, updates, deletions and queries to any and all of the data.  Backup data in accordance with University defined policies and procedures.  Restore data in accordance with University defined policies and procedures.  Easily apply modifications to system based on future requirements.  Electronically edit and upload pre-award budgets to FRS. The following are general requirements for agency accounts. The ability to:  Provide security and accessibility in accordance with University defined policies and procedures.  Provide real time additions, updates, deletions and queries to any and all of the data.  Backup data in accordance with University defined policies and procedures.  Restore data in accordance with University defined policies and procedures.  Easily apply modifications to system based on future requirements. The following are general requirements for the scholarship accounts. The ability to:  Provide security and accessibility in accordance with University defined policies and procedures.  Backup data in accordance with University defined policies and procedures.  Restore data in accordance with University defined policies and procedures.  Easily apply modifications to system based on future requirements.  Load budgets for all scholarship accounts including scholarships funded by endowments. Version 1.1 Page 50 of 54
  • 51. Business Analysis – UITS 11/20/2008  Provide up to date online access to all account information.  Provide real time data synchronization between financial aid, student record and financial record computer applications.  Provide real time additions, updates, deletions and queries to any and all of the data. The following are general requirements for the plant budget. The ability to:  Provide security and accessibility in accordance with University defined policies and procedures.  Provide real time additions, updates, deletions and queries to any and all of the data.  Backup data in accordance with University defined policies and procedures.  Restore data in accordance with University defined policies and procedures.  Easily apply modifications to system based on future requirements.  Display original budget and current plant budget.  Display actual revenue, transfers-in, expenditures, encumbrances, and balances available fiscal year to date and project to date.  Track and modify capital project attributes (i.e., funding sources, project number, accounts completion dates, and responsible parties).  Modify plant budget.  Track changes made to plant budget. The following are general requirements for the auxiliary budgets. The ability to:  Provide security and accessibility in accordance with University defined policies and procedures.  Provide real time additions, updates, deletions and queries to any and all of the data.  Backup data in accordance with University defined policies and procedures.  Restore data in accordance with University defined policies and procedures.  Easily apply modifications to system based on future requirements.  Display current operating budget by account, department, business unit and position.  Display original budget, current operating budget, actual revenues and expenditures, encumbrances, and balances available fiscal year to date.  Display employee related expenditures and encumbrances fiscal year to date. Version 1.1 Page 51 of 54
  • 52. Business Analysis – UITS 11/20/2008  Capture and update the attributes of the organizational hierarchy and business unit.  Input the projected budget for the next fiscal year.  Calculate projected fiscal year ending balance by business unit.  Display and report historical financial data by business unit.  Display and report the operating budget by various consolidations of business units and the organizational hierarchy.  Display and report the operating budget consolidated by various types of expenditures.  Track transfers-in and transfers-out from/to other funding units.  Modify original budget, and current operating budget.  Capture and display Full-Time-Equivalent (FTE) by position, account, department, and business unit.  Produce the annual Local Fund Budget report.  Produce the local fund portion of the State Operating Budget Request.  Produce ad hoc reports. 9 ACRONYMS The following table is a summary of acronyms with definitions that are used throughout this document. ABC Automatic Budget Calculation Weekly program used to derive new expenditure figures. ABR Automatic Budget Automatic FRS method to transfer budget dollars from Reallocation budget pools to specific line items within the pool. ABOR Arizona Board of Regents The governing body for the State of Arizona's public university system which includes the University of Arizona, Arizona State University and Northern Arizona University. AHSC Arizona Health and Science Includes the Colleges of Medicine, Nursing, Pharmacy Center and Public Health. A transaction or process whereby sales and service ASC Administrative Service Charge accounts are assessed for institutional support functions that indirectly benefit University activities. A cooperative initiative among 10 federal agencies and 98 FDP Federal Demonstration institutional recipients of federal funds; its purpose is to Partnership reduce the administrative burdens associated with research Version 1.1 Page 52 of 54
  • 53. Business Analysis – UITS 11/20/2008 grants and contracts. University’s main financial records system. FRS Financial Records System Graduate students conduct research and perform assigned GA Graduate Assistants and related activities. Graduate Associates GL General Ledger Form completed by departments to initiate the hiring HAF Hiring & Appointment Form process for new employees Facilities and administrative costs associated with IDC Indirect Costs research. A module of MATRIX used to process student aid. MATRIX MATRIX Student Aid System SAS A University administrative department. OSFA Office of Student Financial Aid A document generated by the Personal Services Operating PAF Personnel Action Form System (PSOS) that contains detailed information about an employee and the funding for the employee's position. A document that contains all relevant information about PCF Position Control Form the position, position control number, funding source (s), dates of employment, funding for the period of hire and a list of employees who have occupied the position. Personal service encumbrances; Personal service PSOS Personnel Services Operating encumbrance revisions; State account budget loads and System revisions; biweekly payroll expense; payroll adjustments. A program that allows eligible individuals to enroll in QTR Qualified Tuition Reduction courses of study at reduced registration fees. RBC Request for Budget Change A form for requesting budget changes on State and Local accounts. SIS Student Information System The primary database of student records, going back to 1988. SL Subsidiary Ledger SPBAC Strategic Planning and Budget Supports and enhances the success of the University Advisory Committee through thoughtful and informed advice relating to: Version 1.1 Page 53 of 54
  • 54. Business Analysis – UITS 11/20/2008 strategic planning, assessment of institutional priorities, review of budgetary policies, and the evaluation of programs and services. The University’s research administration system that SPINS Sponsored Projects holds information such as proposal status, pending and Information System awarded contracts and grants, account attributes, budget, payment history and SPS accounts receivable. Administrative department. SPS Sponsored Projects Services A special investment in higher education made possible TRIF Technology research incentive by the passage of Proposition 301. funds Version 1.1 Page 54 of 54