2010/2011 Budgeting Guidelines. August, 20102Academic Planning and Budget Why do we need a budget? A budget is a financial plan that represents an operational

2010/2011Budgeting Guidelines

August, 2010 2 Academic Planning and Budget

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.


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.


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


Salaries2009/10 Budget by Quarter

Compensation is 94% of total cost.

Q1 Q2 Q3 Q4 YearTotal

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

0 47,977 33,850 32,617 114,444

0 63,246 58,677 55,583 177,506

14,096 1,380 1,380 1,380 18,236

102,494 102,494 102,494 102,494 409,977 7,787 10,029 5,065 4,145 27,026

349,527 450,277 426,616 421,369 1,647,789

69,917 63,265 96,579 90,348 320,109 0 68,376 62,160 59,052 189,588

69,917 131,641 158,739 149,400 509,697

419,444 581,918 585,355 570,769 2,157,486

1,645 8,371 7,051 5,914 22,981

1,110 56 69 400 1,635

8,004 10,241 12,442 4,825 35,512

0 1,600 6,665 2,613 10,878

5,747 16,527 15,984 2,304 40,561

1,188 1,188 1,188 1,188 4,752

571 1,353 2,230 590 4,745

3,343 3,343 3,343 3,343 13,370

9,189 25 770 183 10,166

0 0 0 0 0

0 0 0 0 0

0 0 0 0 0 0 0 0 0 0

30,796 42,702 49,741 21,360 144,600

450,240 624,620 635,096 592,129 2,302,086 0 0 0 0 0

450,240 624,620 635,096 592,129 2,302,086

1,323,552 (491,042) (474,420) (440,792) (82,701) 82,701 0 0 0 82,701

1,406,254 (491,042) (474,420) (440,792) 0

General Fund Source

Sub-Total Appropriated

Total Revenues

Faculty Ladder

Faculty Temporary

Academic Apprentice

Academic Other

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

Total Expenditures

Surplus/(Deficit)

Carryforward (Approp.)

Ending Balance


SalariesBudget by Quarter


225,150 225,150 225,150 225,150 900,600 Faculty Ladder

Budget creator used even spread for monthly budget

J ul 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 Faculty Ladder


SalariesSalary Detail (in Excel): 2009/10 Faculty Salary Budget

July August September October November December January February March April May June TotalProfessor A 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 120,000Professor B 6,667 6,667 6,667 6,667 6,667 6,667 6,667 6,667 6,667 6,667 6,667 6,667 80,000Professor C 6,250 6,250 6,250 6,250 6,250 6,250 6,250 6,250 6,250 6,250 6,250 6,250 75,000Professor D 8,333 8,333 8,333 8,333 8,333 8,333 8,333 8,333 8,333 8,333 8,333 8,333 100,000Professor E 5,833 5,833 5,833 5,833 5,833 5,833 5,833 5,833 5,833 5,833 5,833 5,833 70,000Professor F 9,583 9,583 9,583 9,583 9,583 9,583 9,583 9,583 9,583 9,583 9,583 9,583 115,000Professor G 7,500 7,500 7,500 7,500 7,500 7,500 7,500 7,500 7,500 7,500 7,500 7,500 90,000Professor H 10,833 10,833 10,833 10,833 10,833 10,833 10,833 10,833 10,833 10,833 10,833 10,833 130,000Professor I 10,050 10,050 10,050 10,050 10,050 10,050 10,050 10,050 10,050 10,050 10,050 10,050 120,600OPEN 0 0 0 0 0 0 0 0 0 0 0 0 0OPEN 0 0 0 0 0 0 0 0 0 0 0 0 0OPEN 0 0 0 0 0 0 0 0 0 0 0 0 0

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


SalariesActual Costs By Quarter


225,985 192,931 281,463 278,313 978,691 Faculty Ladder


Salaries2009/10 Budget to Actual Variance: Favorable/(Unfavorable)


BUDGET: Faculty Ladder 225,150 225,150 225,150 225,150 900,600 ACTUAL: Faculty Ladder 225,985 192,931 281,463 278,313 978,691

Variance: $ (835) 32,219 (56,313) (53,163) (78,091)Variance: % -0.4% 14.3% -25.0% -23.6% -8.7%


Question:

What did the department chair and/or MSO know that wasn’t included in 2009/10 Budget?


SalariesSalary Detail (in Excel):

What 2009/10 budget should have looked like (“What If”)

Salary savings from furlough program started in September Professor I left in October Three positions filled in January

Salary Reduction Effective Sept 1 July August September October November December January February March April May June Total

Professor A 8% 10,000 10,000 9,200 9,200 9,200 9,200 9,200 9,200 9,200 9,200 9,200 9,200 112,000Professor B 7% 6,667 6,667 6,200 6,200 6,200 6,200 6,200 6,200 6,200 6,200 6,200 6,200 75,333Professor C 7% 6,250 6,250 5,813 5,813 5,813 5,813 5,813 5,813 5,813 5,813 5,813 5,813 70,625Professor D 8% 8,333 8,333 7,667 7,667 7,667 7,667 7,667 7,667 7,667 7,667 7,667 7,667 93,333Professor E 7% 5,833 5,833 5,425 5,425 5,425 5,425 5,425 5,425 5,425 5,425 5,425 5,425 65,917Professor F 8% 9,583 9,583 8,817 8,817 8,817 8,817 8,817 8,817 8,817 8,817 8,817 8,817 107,333Professor G 7% 7,500 7,500 6,975 6,975 6,975 6,975 6,975 6,975 6,975 6,975 6,975 6,975 84,750Professor H 8% 10,833 10,833 9,967 9,967 9,967 9,967 9,967 9,967 9,967 9,967 9,967 9,967 121,333Professor I 8% 10,050 10,050 9,246 9,246 0 0 0 0 0 0 0 0 38,592OPEN/Filled in January 8% 0 0 0 0 0 0 10,733 10,733 10,733 10,733 10,733 10,733 64,400OPEN/Filled in January 7% 0 0 0 0 0 0 12,400 12,400 12,400 12,400 12,400 12,400 74,400OPEN/Filled in January 8% 0 0 0 0 0 0 9,200 9,200 9,200 9,200 9,200 9,200 55,200

75,050 75,050 69,309 69,309 60,063 60,063 92,396 92,396 92,396 92,396 92,396 92,396 963,217


SalariesActual Versus “What if” budget

Reduced variability across quarters “What If” budget produced minimal dollar variability “What If” budget produced minimal percentage variability


"What If" BUDGET: Faculty Ladder 219,409 189,434 277,187 277,187 963,217 ACTUAL: Faculty Ladder 225,985 192,931 281,463 278,313 978,691

Variance: $ (6,577) (3,497) (4,276) (1,126) (15,474)Variance: % -3.0% -1.8% -1.5% -0.4% -1.6%

From earlier chart: Variance from Actual BudgetVariance: $ (835) 32,219 (56,313) (53,163) (78,091) Variance: % -0.4% 14.3% -25.0% -23.6% -8.7%


SalariesSalary Detail (in Excel): 2010/11 Proposed Budget

Scenario: ● Professors A, B and C get 5% merit increase effective July 1, 2010 ● Salary reductions in effect for only July and August

Annual salary at June 2010

Without Furlough Savings

Salary Reduction Effective July and

August July August September October November December January February March April May June TotalProfessor A 120,000 8% 9,660 9,660 10,500 10,500 10,500 10,500 10,500 10,500 10,500 10,500 10,500 10,500 124,320Professor B 80,000 7% 6,510 6,510 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 83,020Professor C 75,000 7% 6,103 6,103 6,563 6,563 6,563 6,563 6,563 6,563 6,563 6,563 6,563 6,563 77,831Professor D 100,000 8% 7,667 7,667 8,333 8,333 8,333 8,333 8,333 8,333 8,333 8,333 8,333 8,333 98,667Professor E 70,000 7% 5,425 5,425 5,833 5,833 5,833 5,833 5,833 5,833 5,833 5,833 5,833 5,833 69,183Professor F 115,000 8% 8,817 8,817 9,583 9,583 9,583 9,583 9,583 9,583 9,583 9,583 9,583 9,583 113,467Professor G 90,000 7% 6,975 6,975 7,500 7,500 7,500 7,500 7,500 7,500 7,500 7,500 7,500 7,500 88,950Professor H 130,000 8% 9,967 9,967 10,833 10,833 10,833 10,833 10,833 10,833 10,833 10,833 10,833 10,833 128,267Professor I: OPEN 0 0% 0 0 0 0 0 0 0 0 0 0 0 0 0Professor J 140,000 8% 10,733 10,733 11,667 11,667 11,667 11,667 11,667 11,667 11,667 11,667 11,667 11,667 138,133Professor K 160,000 8% 12,267 12,267 13,333 13,333 13,333 13,333 13,333 13,333 13,333 13,333 13,333 13,333 157,867Professor L 140,000 8% 10,733 10,733 11,667 11,667 11,667 11,667 11,667 11,667 11,667 11,667 11,667 11,667 138,133Professor M 160,000 8% 12,267 12,267 13,333 13,333 13,333 13,333 13,333 13,333 13,333 13,333 13,333 13,333 157,867Professor N 120,000 8% 9,200 9,200 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 118,400

Summary 1,080,000 116,323 116,323 126,146 126,146 126,146 126,146 126,146 126,146 126,146 126,146 126,146 126,146 1,494,105

Include retroactive merits, mid-year retention increases and other case-by-case adjustments in the salary detail.


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.


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.


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.


Using the “Based on Last Year” Spread Rule

What is your conclusion about using the “spread rules”?

A. What would "Spread on Last Year" Look Like:Q1 Q2 Q3 Q4 Total

Percent of salary expense by quarter for 09/10 23.1% 19.7% 28.8% 28.4%$ by Quarter for 10/11 344,997 294,535 429,691 424,883 1,494,106

B. What was the "by month" budget:Q1 Q2 Q3 Q4 Total

"By Month" 358,792 378,438 378,438 378,438 1,494,105% of salary expense by quarter 24.0% 25.3% 25.3% 25.3%

C. Compare "By Month" to "Spread on Last Year"Q1 Q2 Q3 Q4 Total

By Month 358,792 378,438 378,438 378,438 1,494,105Spread on Last Year 344,997 294,535 429,691 424,883 1,494,106

Variance: $ 13,795 83,902 (51,254) (46,445) Variance: % 3.8% 22.2% -13.5% -12.3%

July to December: $ 97,697 July to December: % 13.3%

Basis for Mid-Year Variance Report


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.

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?


BenefitsWhat 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)


Benefits Considerations for 2010/11

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.


BenefitsCalculating 2010/11 Benefits

Question:

Is knowing last year’s 12-month benefit rate enough to calculate the 2010/11 benefit rate?

STEP 1:● Download 2009/10 actual benefits and wage costs.

Use Payroll Expense Distribution Report or QDB download

Total Benefits 347,187 Total wage * 1,285,876

Benefits as % of wage 27%

Recall from our Faculty Salary example that total ladder costs = $978K. Balance of costs are for non-ladder.


BenefitsCalculating 2010/11 Benefits

Answer:

There are several factors that make 2010/11 a challenging year with respect to calculating benefits.

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


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.



We’ll fill out this chart to arrive at one approach to calculating benefits:

% of Salaries

July to December,

2010January to June, 2011

MedicalUCRPEverything ElseSummary Benefit Rate



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 706,750 January to June medical costs 56,540

Medical benefits as % of wage 8%

10% increase in dollars for January to June 2011 62,194 "New" medical benefits as % of wage 9%

Use this as "medical rate" for July to December, 2010

Use this as "medical rate" for January to June, 2011



So far, our benefits chart looks like:

% of Salaries

July to December,


Medical 8% 9%UCRPEverything ElseSummary Benefit Rate



UCRP

Since the UCRP contribution is 4% of wage for all of 2010/11, the next line of the chart is easy:

% of Salaries

July to December,


Medical 8% 9%UCRP 4% 4%Everything ElseSummary Benefit Rate



“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 1,250,000 July, 2008 to June, 2009 "everything else" benefits 225,000

"Everything Else" as % of wage 18%

Use this as remainder of benefits rate



Our completed chart looks like:

% of Salaries

July to December,


Medical 8% 9%UCRP 4% 4%Everything Else 18% 18%Summary Benefit Rate 30% 31%

Benefits as % of salaries could go up by 3.5% to 4.0%.

2009/108%1%

18%27%


How important is getting the benefits % correct?

Approved Budget Actual Variance $ Variance %

36,190,952 36,155,933 35,020 0%

1,924,604 1,619,881 304,724 16%

5,174,295 5,558,953 (384,658) (7%)

3,815,769 3,683,557 132,212 3%

6,933,663 6,687,239 246,423 4% 745,306 736,181 9,124 1%

54,784,589 54,441,745 342,845 1%

8,771,996 8,957,538 (185,542) (2%) Total Salaries & Wages

Benefits

Academic Apprentice

Academic Other

Career Staff

Non-Career Staff

Faculty Ladder

Faculty Temporary

Y-T-D(Jun)

Benefits as % of Wages 16.0% 16.5%

Small percentages can translate to large dollars:

Note divergence of benefits and salary variances

Note variance of

benefits “floats”

with salary variance

"What if" : Budget constructed at 16.5%:Approved Budget Actual Variance $ Variance %

54,784,589 54,441,745 342,845 1%Benefits $ 9,039,457 8,957,538 81,919 1%



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.


Fee Remissions (19900 Funds) 2009/10 Actual Versus Budget


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%

2,042,795 1,276,102 766,693 38%

2,860,177 3,210,177 (350,000) (12%)

1,468,449 1,192,372 276,078 19%

6,300,544 6,265,583 34,961 1% 184,232 181,516 2,716 1%

29,627,887 28,745,849 882,038 3%

4,453,924 4,282,847 171,077 4% 1,024,572 45,041 979,531 96%

5,478,496 4,327,888 1,150,608 21%

35,106,383 33,073,737 2,032,646 6%

Y-T-D(Jun)

General Fund Source


Total Revenues

Faculty Ladder

Faculty Temporary

Academic Apprentice

Academic Other

Career Staff

Non-Career Staff


Benefits

Fee Remissions

Total Benefits

Total Compensation


Fee Remissions (19900 Funds) 2009/10 Budget by Quarter


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

209,670 620,211 556,112 656,801 2,042,795

273,698 833,945 843,079 909,455 2,860,177

607,508 285,853 257,741 317,346 1,468,449

1,534,074 1,570,033 1,533,132 1,663,305 6,300,544 52,897 51,689 33,305 46,340 184,232

6,884,059 7,529,973 7,405,681 7,808,175 29,627,887

990,695 1,026,155 1,238,688 1,198,385 4,453,924 45,270,590 139,550,386 40,166,330 (223,962,734) 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


Total Revenues

Faculty Ladder

Faculty Temporary

Academic Apprentice

Academic Other

Career Staff

Non-Career Staff


Benefits

Fee Remissions

Total Benefits

Total Compensation


Fee Remissions (19900 Funds)2009/10 Actual by Month

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 Fee Remissions

11 months of gross expense

Net expense transfer in June (includes YTD

expense transfer + June expense)

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.


Fee RemissionsJ ul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun YearTotal

0910 Fee Remissions 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

Total Activity July to May: 2009/10 1,637,737

J ul Aug Sep Oct Nov Dec Jan Feb Mar Apr May

% of total July to May occuring in each month 0.3% 0.0% 0.0% 15.8% 15.3% 1.2% 16.3% 15.4% 0.9% 26.2% 8.6%

Fee Remission allocaton for 2010/11 1,801,511

J ul Aug Sep Oct Nov Dec Jan Feb Mar Apr May

Budget for 2010/11by Month: July to May 4,864 - - 284,103 275,587 22,462 293,935 277,850 15,952 471,519 155,238

J ul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun YearTotal

Assume June reverses July to May so YTD = 0 4,864 - - 284,103 275,587 22,462 293,935 277,850 15,952 471,519 155,238 (1,801,511) 0


Fee RemissionsRecommendations

1) Using automated spread rules is not recommended2) Your fee remission budgeting method depends on which

option you chose in 2009/10 for benefits3) 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).


Adjustments to the Unexpended Balance2009/10 Budget Vs Actual Results


366,484 158,471 (208,014) (57%)

366,484 158,471 (208,014) (57%)

366,484 158,471 (208,014) (57%)

0 0 0 0%

0 0 0 0%

0 0 0 0%

0 0 0 0%

992,395 970,275 22,120 2% 703,687 426,351 277,336 39%

1,696,082 1,396,627 299,455 18%

317,553 276,443 41,110 13% 0 0 0 0%

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 2,639,420 282,420 10%(2,617,551) (2,235,941) (381,610) (15%)

304,289 403,479 (99,190) (33%)

62,195 (245,009) (307,204) (494%)

217,920 217,920 0 0%(62,195) (93,213) (31,018) (50%)

217,920 (120,301) (338,221) (155%)

Carryforward (Non-Approp.)

Adjustments to Unexp. Bal.

Ending Balance


Recharges

Total Expenditures

Surplus/(Deficit)









Communications


Services


Total Benefits

Total Compensation



Non-Career Staff


Benefits

Fee Remissions

Faculty Temporary

Academic Apprentice

Academic Other

Career Staff

Sales and Service Source

Sub-Total Non-Appropriated

Total Revenues

Faculty Ladder

Department ZZ: Sales and Service

Y-T-D(Jun)


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


Adjustments to the Unexpended Balance2009/10 Budget Vs Actual Results


217,920 217,920 0 0%(62,195) (93,213) (31,018) (50%)

Carryforward

Adjustments to Unexp. Bal.

Y-T-D(Jun)


Adjustments to the Unexpended BalanceWhat does the ledger look like?

Carryforward = $217,920

Total of adjustments = $93,213

Break apart carryforward and adjustments as two separate entries in CBIG.


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)


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 mid-year 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


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


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


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 July-December (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


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


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.


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


Budget to Actual Variance Analysis(Horizontal)


28,465,202 27,546,385 (918,817) (3%)

28,465,202 27,546,385 (918,817) (3%)

28,465,202 27,546,385 (918,817) (3%)

9,092,327 9,491,222 (398,895) (4%)

1,733,912 1,577,469 156,443 9%

980,774 1,112,450 (131,675) (13%)

1,201,879 1,308,097 (106,218) (9%)

7,875,805 7,334,782 541,023 7% 293,002 227,797 65,205 22%

21,177,699 21,051,816 125,883 1%

4,606,937 3,938,761 668,176 15% 840,376 52,651 787,725 94%

5,447,313 3,991,413 1,455,900 27%

26,625,012 25,043,228 1,581,784 6%

238,885 91,643 147,242 62%

3,903 3,500 403 10%

220,600 251,908 (31,308) (14%)

109,627 121,628 (12,002) (11%)

694,094 1,236,702 (542,609) (78%)

412,431 77,606 334,825 81%

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%

2,278,658 2,021,797 256,861 11%

28,903,670 27,065,025 1,838,645 6% 0 0 0 0%

28,903,670 27,065,025 1,838,645 6%

(438,468) 481,360 919,828 210% 679,956 679,956 0 0%

241,487 1,161,316 919,828 381%

Surplus/(Deficit)


Ending Balance



Recharges

Total Expenditures










Communications


Services

Fee Remissions

Total Benefits

Total Compensation


Career Staff

Non-Career Staff


Benefits

Faculty Ladder

Faculty Temporary

Academic Apprentice

Academic Other

General Fund Source


Total Revenues

School QQ: GENERAL FUNDS (19900)

Y-T-D(Jun)


Variance Analysis: Revenue(Horizontal)


28,465,202 27,546,385 (918,817) (3%)General Fund Source

Y-T-D(Jun)

Temporary budget reduction accounts for approximately $250K of variance

Remaining variance due to overestimation of revenue by four departments


Variance AnalysisBenefits and Fee Remissions

(Horizontal)

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


21,177,699 21,051,816 125,883 1%

4,606,937 3,938,761 668,176 15% 840,376 52,651 787,725 94%Fee Remissions


Benefits

Y-T-D(Jun)


Variance AnalysisOperating Expenses

(Horizontal)

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


238,885 91,643 147,242 62%

694,094 1,236,702 (542,609) (78%)

412,431 77,606 334,825 81%

434,633 51,153 383,480 88%



Services


Y-T-D(Jun)


Vertical Perspective: How much money do I have left?


28,465,202 27,546,385 (918,817) (3%)

28,465,202 27,546,385 (918,817) (3%)

28,465,202 27,546,385 (918,817) (3%)

9,092,327 9,491,222 (398,895) (4%)

1,733,912 1,577,469 156,443 9%

980,774 1,112,450 (131,675) (13%)

1,201,879 1,308,097 (106,218) (9%)

7,875,805 7,334,782 541,023 7% 293,002 227,797 65,205 22%

21,177,699 21,051,816 125,883 1%

4,606,937 3,938,761 668,176 15% 840,376 52,651 787,725 94%

5,447,313 3,991,413 1,455,900 27%

26,625,012 25,043,228 1,581,784 6%

238,885 91,643 147,242 62%

3,903 3,500 403 10%

220,600 251,908 (31,308) (14%)

109,627 121,628 (12,002) (11%)

694,094 1,236,702 (542,609) (78%)

412,431 77,606 334,825 81%

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%

2,278,658 2,021,797 256,861 11%

28,903,670 27,065,025 1,838,645 6% 0 0 0 0%

28,903,670 27,065,025 1,838,645 6%

(438,468) 481,360 919,828 210% 679,956 679,956 0 0%

241,487 1,161,316 919,828 381%


Ending Balance



Recharges

Total Expenditures




Surplus/(Deficit)





Communications


Services


Total Benefits

Total Compensation



Non-Career Staff


Benefits

Fee Remissions

Faculty Temporary

Academic Apprentice

Academic Other

Career Staff

General Fund Source


Total Revenues

Faculty Ladder

Y-T-D(Jun)


Any final questions?

Documents

2010/2011 Budgeting Guidelines. August, 20102Academic Planning and Budget Why do we need a budget? A budget is a financial plan that represents an operational