Why do we have to budget?
A budget is a plan—a method to ensure that revenues are spent to
achieve specific goals. A budget is also a control mechanism that
provides a method for the higher administration to monitor revenues
and expenditures. In the academic environment, a budget represents
commitments to meet enrollment levels, implement research programs
and provide a service to the faculty and students.
I’m a new faculty member at the University. How am I supposed to
know about the State and University policies and procedures?
The Division of Human Resources (http://hr.sc.edu/)
has a “New Employee FAQ” page and offers University Orientation once
a month. You can register by phone or by e-mail to
Mina Antley at 777-6578. We are
in the process of developing a presentation that informs all
employees of the many services offered by the administrative units on
campus. Check back often!
Our department is co-sponsoring an event for a conference being
hosted by another college on campus. An intra-institutional transfer
(IIT) was submitted to transfer funds to support this event and it
was rejected by the Controller’s Office. Why?
A transfer of funds should be handled by a journal entry (when
transferring non-“A” funds to an “A” fund) or a budget transfer. An
IIT (See
http://www.sc.edu/policies/busf206.html) is a reimbursement for
“goods or services rendered.” A journal entry for a transfer of
expenditures could have also been used.
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Several faculty members in our college are participating in an
academic support program. The program provides a small amount of
funds that can be used to either provide additional compensation to
the faculty member or to reimburse the department for the faculty
member’s time. Why can’t the funds just be transferred to us?
If the faculty member is hired by the other program to perform
additional duties that qualify as dual employment (See
http://hr.sc.edu/hr/policies/hr178.htm), the other program as the
requesting or secondary agent is responsible for initiating the
appropriate paperwork. A budget transfer is not appropriate in this
case.
If the faculty member assumes the duties as part of his “normal
teaching load” (See page 35
http://www.sc.edu/policies/facman/) and expects no compensation
of any kind, an IIT (See
http://www.sc.edu/policies/busf206.html) may be used to reimburse
the college/department for “contractual services rendered.”
If our funds are unrestricted, why can’t we spend them on whatever
we feel is needed for our unit?
Resources of institutions are classified according to fund types.
(Click Here). Two types of funds
are: 1) unrestricted and 2) restricted. Unrestricted funds are
typically called “E&G” which stands for educational and general
funds. These funds are considered unrestricted because they are not
subject to externally imposed legal restrictions. Restricted funds
are governed by limitations as imposed by a donor, grantor, or other
entity. All funds are subject to the laws and regulations of the
State of South Carolina as well as the policies and procedures of the
University of South Carolina. See “about account codes” (Click
Here) on the Business and Finance website.
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Help! I recently received the preliminary budget information for
next fiscal year and the allocation for my department is not enough!
What do we do?
As you can see from the flowchart below, the University does have a
budget process. Most units go through a similar budget process
internally during development of the annual strategic plan.
Unfortunately, the Budget Office cannot change your allocation
without the proper authorization. It will be necessary for you to
submit a budget that is in balance with your allocation and address
the shortage through the proper channels.
The Board’s budget approval is based on its power: “to adopt such
measures and make such regulations as may in the discretion of the
board of trustees be necessary for the proper operation of the
University” (paragraph 14, Section 59-117-40). As indicated in the
“Delegation of Authority” statement at the end of this preface, the
budgets approved are by their very nature estimates that will change
with changing circumstances during the fiscal year.
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I have been an employee of the University for several years, but
this is the first year I have dealt with budgets. I plan to attend
the training, but I have a simple question that I don’t feel
comfortable asking in a roomful of people. What does “BD” mean?
No question is ever too simple to ask—even in a roomful of people!
“BD” actually is an acronym for budget data. Many of us are guilty of
using business “slang” such as BD, JE, RQ and it’s good to be
reminded that not everyone knows the meaning of these terms.
How do I know whom to contact about my budget?
Visit the
Budget Office website scroll down
to “Staff Assignments.”
What is a contraexpenditure?
Monies received that are recognized as a reduction of expense rather
than as revenue. Revenue should not be recognized because this is a
University internal transaction from a University service department.
This accounting process eliminates the double counting of
expenditures within the same organization for financial statement
purposes. A contraexpenditure in our accounting system is represented
as a “6xxxx” object code and usually has a corresponding “5xxxx”
object code. Most people refer to a contraexpenditure as an IIT or an
intra-institutional transfer. (See Intra-Institutional Transfers
http://www.sc.edu/policies/busf206.html)
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How does budgeted revenue affect my account?
You are allowed to budget revenue in your “A” fund accounts as
needed. When establishing a revenue budget, you will prepare a normal
budget transfer (BD) to credit the appropriate revenue “4xxxx” object
code and debit an expense “5xxxx” object code (see
http://www.sc.edu/policies/busf200.html). At the beginning of the
fiscal year, your initial budget allocation may include an estimate
of funds you expect to receive from some external source, i.e.,
budgeted revenue. If these funds are not received as budgeted, you
will need to adjust your budget to reflect the actual funds received.
(See Revenue Classification Codes
http://www.sc.edu/policies/busf203.html)
How do I close out an “E Fund” account?
Units wishing to close out an Other Educational and General Program
Account (E Fund account) must submit a written request to the budget
office after taking appropriate action to ensure that no charges will
be incurred during deactivation or after the account has been closed.
To this end, the unit will need to complete the following activities
prior to issuing the deactivation notice to the budget office:
- Process an account memorandum to change the direct charge flag
to “NO” so that direct charges do not continue to accrue during the
deactivation period.
- For any payroll expenditures set-up on the account, prepare
personnel documents to transfer these costs to other accounts.
- Issue written notices to service departments of the University
(telephone, postal, computer services, etc.) that charges to the
account are not appropriate after a closing date to be set by the
unit. This action may include disconnecting telephone services and
throwing away preprinted postal charge slips.
- Cancel or transfer to another account all outstanding
commitments indicated on the management statement for materials or
services that will not be received prior to the closing date
selected by the unit.
- Supply the necessary documents needed to clear the commitment
and initiate payment for materials or services shown as outstanding
commitments and received prior to the closing date selected by the
unit.
After all financial obligations have been satisfied in the account
as demonstrated by no active commitment balances and 30 days of
expense inactivity, the unit will issue a written request to the
budget office to transfer any residual funds to the account of
their choosing and issue a deactivation request to accounting
services. The budget office will verify the account’s inactivity,
prepare the appropriate forms needed to initiate the transfer of
funds and to deactivate the account, forward these requests to
accounting services for processing, and notify the unit when these
actions have been completed.
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