Allotment of Funds and Requests for Budget Adjustments/Revisions

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University Policy Number 4

Categorized:

Responsible Office:

Policy Procedure:

  • See below

Related Law & Policy:

  • N/A

I. Scope

These policies and procedures provided herein apply to all George Mason University locations, owned and leased including Fairfax Campus, Arlington Campus, GMU at Prince William and GMU at the Center for Innovative Technology.

II. POLICY STATEMENT

The University’s funds are allocated by the Governor in accordance with a funding program that is based on anticipated local revenues (tuition, etc.) and a State appropriation through the State Biennium Budget process.  The funds are then allotted to Units (Dean/Director/Vice President) and to each department within a unit, through the University’s annual Maintenance and Operation budget process.  The amounts allocated and expended during a fiscal year cannot exceed the Governor’s allocations.  Funding adjustments that revise the original budgets for Educational & General and Auxiliary Enterprises include central and unit transfers. Specific procedures are set forth within this document to deal with the various documentation requirements needed for transfers.

At the beginning of the fiscal year (July 1-June 30), Units are notified of their budget for that particular year.  The documents provide an overall budget summary for the Unit as well as a breakdown summary by department level as applicable.  In addition, budgets are broken down by personnel (full-time faculty, part-time faculty, graduate assistants, administrative faculty, classified, wages, student wages, college work-study wages and fringe) as well as non-personnel (general operating supplies, etc).

Unforeseen circumstances and changes in operations will make it necessary to consider revisions to the funding throughout the year. Adjustments to budgets are funded centrally or at the unit level.  Any changes to budgets require appropriate documentation as outlined below.

III. RESPONSIBILITIES

It is the responsibility of each head of a department or activity to which funds are allotted, to plan and conduct assigned operations so as not to expend more funds than are allotted.  Monthly status reports (FBM’s 90, 91, 92) are provided for the purpose of monitoring and controlling expenditures.  In instances where a reallocation or adjustment of funding is required, it is the responsibility of each head of a department or activity to request those transfers as outlined in the procedures.  Most adjustments are funded through reallocations of the unit’s base funding. Central adjustments generally address annual salary increases and fringe benefit adjustments.

IV. PROCEDURES

  1. CENTRAL BUDGET ADJUSTMENTS – Central budget adjustments are modifications to the original plan that originate and/or are funded through central review. They include the following:
    1. Fringe Benefits for Educational & General (Ledger 1) Activities. Fringe benefits are based on benefit costs as set by the state and historic utilization of benefit programs; are accepted by the University’s cognizant agency for federal research; and are consistent across all fund types.Fringe benefits are budgeted based upon the average cost for each category of employee.  As salaries are charged to budgets, the associated fringe benefit costs are assessed based on the applicable fringe benefit rate.  Rates by employee class can be found on the Budget Office website under the Budget Data tab.
    2. Annual Salary Increases for Educational & General (Ledger 1) and Auxiliary Enterprises (Ledger 3) Activities. Once the Provost, Senior VP and President (usually effective for the pay period beginning November 25th) have approved annual salary increases, the Budget Office will allocate funds to cover the partial year cost of the increases.  The full year cost of the increase will be included in the next year’s annual budget.  A memorandum is sent to each major Unit informing them of the adjustments and attaching a detailed report (by account, by category, by position) that supports the amount of the adjustment.  Salary increases for departments that are sustained with self-generating revenues must be offset by those revenues, and not at the central level.
    3.  Central Revenue. Revenue projections, such as tuition and fees, are modified based on the quarterly review process and actual student FTE enrollment.  Non-tuition revenue collections are also modified at the same time.  Since these are modified at the central level, the adjustments are made as a result of analyses of actuals and revised projections.  The Central Budget Office Analyst completing the adjustment will retain background documentation (requesting email, spreadsheets, reports, etc.) with the budget adjustment batch kept in the Budget Office.
    4.  University Obligations/Commitments.  University obligations/commitments adjustments may be related to unanticipated emergency situations.  These should be requested through the Asst. VP, Budget and Planning and CBO and will be approved by the Provost and/or the Senior VP, depending on the unit generating the request.  Adjustments may be either one-time or permanent adjustments made for various academic programming or operational needs. Authorization to complete the adjustment is submitted either by email or memorandum.  Once the adjustment has been completed, an email or memorandum is sent to all affected parties notifying them of the adjustment.  Memorandum contains account numbers with object codes, the amount of the adjustment, any supporting documentation and a completion date.  The Central Budget Office Analyst completing the adjustment should attach the notification memorandum, and backup documentation to the batch that is kept in the Budget Office.  The last type of university obligations/commitments includes requests for carry-forward of excess funding from one fiscal year to the next.  For instance, revenue funds may be deposited at the end of the fiscal year, and final expenses related to that activity might not occur until the following fiscal year.  In such cases, revenues would need to be carried forward from one fiscal year to the next.  Other events may warrant a carry-forward of regular Educational and General funds.  Another such event that would warrant a request would be if a good or service was ordered through Material Management, and a Purchase Order was issued by them (meeting the deadlines set forth by that office), but the good or service was not actually received until the fiscal year closed.  If these criteria are met, and the Unit had an available balance at the end of the fiscal year that would have supported this good or service had it been received, then a carry-forward request could be submitted.  Any requests for carry-forward of funds should be directed to the Asst. VP, Budget and Planning and CBO (with an informational copy to the Central Budget Office Analyst assigned to the particular Unit) by the fifth business day of the new fiscal year.  The request should provide account(s) impacted, dollar amounts and justification for the carry-forward of funds. Once final decisions are made regarding the carry forward requests the Central Budget Office Analysts will make a one-time revision to the budget impacted.  Once the entry has been completed, a memorandum is sent to the requesting Unit notifying them of the adjustment.  The memorandum contains account numbers with object codes, the amount of the adjustment, any supporting documentation and a completion date.
    5.  Enrollment Variance Funding Adjustments. Enrollment targets for the university are set well in advance of the beginning of the fiscal year.  The Asst. VP, Budget and Planning and CBO and the Director of Enrollment Planning meet with Dean/Directors or their designees to identify appropriate enrollment targets.  Enrollment targets and actuals are used to develop resource allocations during the budget development process.  Summer and Fall Term enrollment adjustments are completed in October.  Spring Term enrollment adjustments are completed in March.  Unit budgets may be revised following the review of targets versus actuals. Funding is approved with targets in mind.  If targets are not met, then tuition revenues for the university will not be met and expense budgets for the various Units must be reduced as well.  If targets are exceeded, positive adjustments may result based on further discussions with the particular Unit.
    6. Prior to adjustments being completed for enrollment related variances, communication will occur between the Asst. VP, Budget and Planning and CBO and the Dean/Director or designee to discuss the impending adjustment and discuss any issues related to current or future years targets.  The Asst. VP, Budget and Planning and CBO requests one of the Central Budget Office Analysts to complete the adjustments.  Once completed, a memorandum is forwarded to the Deans/Directors notifying them of the adjustment.  A copy of the memorandum is attached to the budget batch and kept in the Budget Office.
    7. Self-Generated Revenue Adjustments. Throughout the year, the Central Budget Office monitors self-generating revenue accounts.  These include such programs as: for credit and not-for-credit contract courses, conference activities, certificate programs, etc.  Expense budgets need to reflect the proper levels of revenue proceeds throughout the course of the year.  Since the original budget is an initial plan, the actual revenue may vary and it is important to update the expense and revenue accounts on a regular basis.  The Central Budget Office staff will review these monthly and determine when adjustments to revenue/expense accounts should take place, working closely with the Unit impacted to ensure that all revenues are collected in a timely manner and the monthly reports correctly reflect the activity.Once the budget adjustment has taken place, the Central Budget Office Analyst will send a memorandum/email to the responsible person listed on the account(s) affected.  Information will include the account numbers with object codes, the amount of the adjustment and any backup reports that were utilized in the determination of the amount of the adjustment and a completion date . The Central Budget Analyst should attach the memorandum, backup reports, etc. to the budget batch kept in the Budget Office.

     

  2. UNIT BUDGET ADJUSTMENTS AND DOCUMENTATION – Unit budget adjustments are modifications to the original plan that originate and are funded within each Unit’s current level of funding.
    1. Inter-Unit Adjustments. These adjustments are typically related to cost-sharing and matrix replacement agreements between two Units.  For instance, a faculty member may teach a course for another College/Institute.  The “home” Unit identifying the new assignment and funding for the faculty member completes a Salary/Funding Change document.  A budget adjustment is completed crediting (decreasing) funds from the “home” Unit and debiting (increasing) the “visiting” Unit.  This movement of both the assignment and the budget gives an accurate accounting of the faculty effort levels.  The Salary/Funding Change document is typically the only documentation forwarded to the Budget Office as notification of the change in assignment.  A Central Budget Office Analyst works with the two Units involved ascertaining what type of matrix replacement has been agreed upon.  The “visiting” Unit requesting the transfer and a budget adjustment moving matrix replacement funds/FTE to the “home” Unit sends an email or memorandum.  A memorandum or email is sent to the affected account representatives for the Units.  The following should be included: reason for adjustment (attach Salary/Funding Change document and any other documentation related to the matrix replacement); account numbers with object codes, the amount of the adjustment, any supporting documentation and a completion date.  The Central Budget Office Budget Analyst should attach all of this documentation to the budget batch kept in the Budget Office.When sharing the cost of an item between two or more units, the request for payment should indicate the various accounts and amounts to be charged.  This replaces the need for either a budget adjustment or a journal voucher and allows for the accurate accounting of the expenditure.
    2. Intra-Unit Adjustments. These types of adjustments take place at the Unit level and are completed by either a member of the decentralized Budget Office or by the business manager/analyst for the particular Unit.  During the course of the year, programmatic/operational needs for the Unit may necessitate a reallocation of resources within the Unit. Occasionally new accounts are set up to better align functions within the Unit.  Decentralized Budget Office staff and business managers/analysts for the Unit have the discretion to move budgets within their accounts, within object codes, etc.  Their Financial Systems security is set up to allow only entries within their Unit for which they are responsible.  The designees have the discretion to make various adjustments in order to provide them with the tools for resource management.The Budget Office requires the following relative to intra-unit adjustments and documentation: The staff member should keep as much documentation related to the adjustment as possible.  For example, if an FRS/HRS statement or a spreadsheet was used to formulate the amount of the adjustment, this should be attached to a copy of the budget batch and kept within the Units internal office files.  If the adjustment was completed as a result of an email, attach the email to the budget batch.  If the adjustment took place due to reorganization include a copy of the old and new organizational chart.For those Units who do not have access to make budget adjustments at the intra-Unit level, a formal request must be submitted to their Central Budget Office Analyst.  This may take the form of a memorandum, email, or submission of the “Budget Transfer Request Form” (Addendum A).  The request should include the account numbers affected with object codes, dollar amounts and the reason behind the adjustment.  Various reasons may cause these adjustments to be necessary to properly reflect the Unit’s planned use of funding.  After receipt of this request, the Central Budget Office Analyst will complete the adjustment. Notification will be forwarded to the original requestor of the adjustment (memorandum or email) informing them that the adjustment has been completed on a particular date.  The Central Budget Office Analyst will attach the original request, and notification of the adjustment to the budget batch kept in the Budget Office.

V. AMENDMENTS AND ADDITIONS

All amendments and additions to to this policy are to be reviewed and approved by the Asst. VP, Budget and Planning and CBO.

VI. EFFECTIVE DATE

The policies herein are effective May 1, 2001. This Administrative Policy shall be reviewed and revised, if necessary, annually and to become effective at the beginning of the University’s fiscal year, unless otherwise noted.

Date of most recent Review: December 13, 2012