Supervisory Training Management Level Supervisors Budgeting 101 Michele Sexton Director of Budget amp Human Resource Services 6202354188 msextonpittstateedu Lauren Werner Assistant Director of Budget ID: 1027331
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1. 1Pittsburg State UniversitySupervisory TrainingManagement Level SupervisorsBudgeting 101Michele Sexton, Director of Budget & Human Resource Services 620-235-4188 (msexton@pittstate.edu)Lauren Werner, Assistant Director of Budget 620-235-4105 (lwerner@pittstate.edu)204 Russ Hall(August 1, 2013)
2. 2Important TermsAllotment System: A procedure under which appropriated funds are allocated periodically to agencies when resources appear insufficient to cover appropriations. The system, authorized by KSA 75-3722, is intended to assure that expenditures do not exceed available resources during a fiscal year.Appropriation: A specified amount of money for a particular purpose that an agency is authorized to spend during a fiscal year. Generally, the entire amount is available at the start of the fiscal year.
3. 3Important TermsBudget ProgramsInstruction (2010) – Colleges of Arts & Sciences, Business, Education and Technology and Continuing and Graduate StudiesAcademic Support (2040) – Academic administration; Library Services; Teaching, Learning & Technology; Information SystemsInstitutional Support (0160) – President’s Office; Provost; Vice President for Administration & Campus Life; Vice President for University Advancement, Business Office; Budget & Human Resource Services; Analysis, Planning & Assessment; Alumni Relations, Public Relations; Printing & Postal ServicesResearch (2100) – sponsored research projectsPublic Service (2230) – services provided to the general community, including non-credit producing workshops and conferences.Student Support (2050) – Campus Life; Enrollment Management & Student Success; Registrar; Admission; Testing Services; Student Financial Assistance; Career Services; Intercollegiate AthleticsPhysical Plant (9670) – Physical Plant; Facilities Planning; University PoliceStudent Aid (3080) -- ScholarshipsAuxiliary Enterprises (3791) – University Housing; Parking; Student HealthService Clearing (9393) – Duplicating & Printing Services; Instructional Media Services; Motor Carpool, Telephone ServicesDebt Service (9894) – Expenditures from bond fundsCapital Improvements (9999) – Construction, Repair & Replacement Costs
4. 4Important TermsExpenditure Categories: Classifications for goods and services purchased by the state agencies Primary among these are the following:Salaries and Wages – Payment to state officers and employees for their personal services, and the state’s costs for employee benefits such as FICA, retirement contributions, workers compensation, unemployment insurance, the state leave payment assessment, and health insurance.Contractual Services – Payments for various services including communications, travel, utilities, and consultant services.Commodities – Payments for consumable materials, supplies, and parts used in the operation of the agency.Capital Outlay – Expenditure for items having a normal life of more than one year, such as office equipment, machinery, furniture and motor vehicles.Operating Expenditures – An expenditure summary category incorporating all agency expenditures, except capital improvements.Debt Service – Payments of the interest and principal included in agency budgets on various forms of debt financing, including bonded indebtedness, PMIB loans, master lease, Facility Conservation Improvement Program, third-party and other miscellaneous debt.Non-Expense Items – Disbursement such as refunds, advances and investments which do not represent government cost.Capital Improvements – Cash or debt service principal payments for construction of highways, buildings or other facilities, remodeling and additions to existing structures, rehabilitation and repair projects, razing of structures, and the purchase or improvement of land.
5. 5Important TermsFinance Council: A state organization empowered to act on certain matters of legislative delegation, usually when the Legislature is not in session. The Council comprises the Governor (chair), President of the Senate, Speaker of the House of Representatives, Majority and Minority Leaders of each chamber, and the Chairpersons of the Senate Ways and Means and House Appropriations Committees.Fiscal Year: The state fiscal year runs from July 1 to the following June 30 and is numbered for the calendar year in which it ends. The “actual fiscal year” is the year which concluded the previous June. The “current fiscal year” is the one which ends the coming June. The “budget year” refers to the next fiscal year, which begins the July following the Legislature’s adjournment. “Out-years” refers to the years beyond the budget year.FY 2014 – July 1, 2013 through June 30, 2014Payroll/Appointment Dates (June 9, 2013 through June 7, 2014)
6. 6Important TermsFunds: Basic units of classification in both the budget process and the accounting system for agency monies. Monies in a fund may be used for a specific purpose as provided by law. Each fund is maintained in accordance with generally-accepted accounting principles with a self-balancing set of accounts recording all resources together with all related obligations, reserves, and equities. The major funds of PSU include the following:State General Fund (SGF) – A fund for revenues not earmarked or dedicated for special purposes. It is used to finance governmental operations not provided by other funds. The principal revenue source for the State of Kansas State General Fund include individual and corporate income taxes, sales and compensating use taxes, severance and other excise taxes, and interest earnings.General Fees Fund (GF) – Tuition revenueGeneral Use (GU) - State General Fund and General FeesRestricted Fee Funds (RF)Local FundsClearing FundsAuxiliary FundsFoundation Funds
7. 7Important TermsMEGA Appropriations Bill: Legislation which includes appropriations for all state agencies. Appropriation bills are effective for one year, unlike substantive statutes, which are effective on a permanent basis until amended or repealed. The MEGA bill contains supplemental appropriations and adjustments to the current fiscal year, appropriations for operating budgets for the upcoming fiscal year, and appropriations for capital improvements for the forthcoming fiscal year and any applicable out years as a multi-year appropriation.Object Code: A code used for accounting purposes in addition to a written description to describe the specific items or services purchased by state agencies within various expenditure categories. Codes are prescribed by the Policy and Procedure Manual, Filing 7,002 prepared by the Division of Accounts and Reports.Omnibus Appropriations Bill: A bill containing numerous individual appropriations for both the current and budget fiscal years that is considered during the “veto” stage of a legislative session. It finances items such as substantive legislation that passed and Governor’s budget amendments adopted by the Legislature.
8. 8Important TermsRevenue Estimates: Projections of anticipated State General Fund revenue for the current and budget fiscal years. An estimate is developed on a consensus basis by the Division of Budget, Department of Revenue, university economists, and the Legislative Research Department twice annually. In November an estimate is made for the current and budget years. This estimate forms the basis of the Governor’s budget recommendations to the Legislature. In the spring, prior to the end of the legislative session, the current and budget year estimates are reviewed and revised, if necessary.Shrinkage: The difference between the cost of fully funding salaries and wages in a budget, assuming all positions were filled at all times, and the actual salary costs, taking vacancies into account. Also called “turnover,” it is expressed as a percentage.
9. 9Budget DocumentsBudget RequestAnnual Operating Budget
10. 10Budget Cycle
11. 11Budget Request Timeline FY 2014 (July 1, 2013 – June 30, 2014) May - June, 2012: Finalize PSU FY 2013 Annual BudgetJune 2012: FY 2014 Budget Request Proposal approved by KBOR July, 2012: Interface salary & fringe data from the FY 2013 Annual Budget to Division of Budget system for the FY 2014 Budget RequestAugust 15, 2012: Access DOB system. Reconcile salary & fringe data for FY 2013 & FY 2014 with PSU files; Enter OOE expenditures for FY 2013 & FY 2014; Reconcile DOB and PSU files.September 15, 2012: Submit request for FY 2014 Budget in DOB system. Complete Narrative & Operating Summary. Prepare paper request for internal staff use.November, 2012: Division of Budget RecommendationsDecember, 2012 – March, 2013: PSU Tuition CommitteeJanuary, 2013: Governor’s RecommendationsJanuary – May, 2013: Legislative ActivityMay – June, 2013: Tuition Request Approved by KBORMay – June, 2013: Finalize PSU FY 2014 Annual Budget
12. 12Tracking Sheets
13. 13Budget Request DocumentSection IAuthorizationUniversity Division MissionsPSU Strategic Plan 2007 – 2015Performance MeasuresBudgetary Organizational ChartAccreditation StatusPerformance Agreement
14. 14Budget Request DocumentSection IITables by Category and ProgramFringe Benefit RatesSection III Division of Budget Forms
15. 15Establishing the FY 2014 Annual Operating BudgetSalariesUnclassifiedClassifiedGraduate Assistants & StudentsLump SumsOther Operating Expenditures (OOE)
16. 16Establishing the FY 2014 Annual Operating BudgetUnclassified SalariesPrevious FY Salaries with changes for turnover & employee movementSpreadsheets - increases and adjustmentsVice PresidentsKNEA UnitApproval by PresidentAppointments Letters Issued
17. 17Establishing the FY 2014 Annual Operating BudgetClassified Salaries Civil Service Pay MatrixChanges approved by LegislatureMarket AdjustmentsReallocations
18. 18Establishing the FY 2014 Annual Operating BudgetGraduate AssistantsSalaries determined by Provost after tuition for 2013-2014 academic year approvedGTA salary includes tuition waiverStudentsAllocations for student salaries approved by the Vice President for the division
19. 19Establishing the FY 2014 Annual Operating BudgetLump SumTemporary Salaries (Classified & Unclassified)SF1,CIT,CIP,ReservesFringe Rates applied to all Salaries
20. 20Establishing the FY 2014 Annual Operating BudgetOther Operating ExpendituresAllocations approved by the Vice President for the divisionBalance to Tracking SheetOpening Journal Entries / Allocations prior to July 1, 2013FY 2014 starts on July 1, 2013
21. 21Monitoring the FY 2014 Annual Operating BudgetSalaries Budgeted v. non-budgetedMonitored through the Electronic Appointment Process and by the Budget officeDepartments with Grants monitor salaries with monthly payroll reportsShrinkage
22. 22Monitoring the FY 2013 Annual Operating BudgetOOEMonitored by the Business OfficeGL.LOOK in GUS
23. 23Budget Web PageBudget Web Page – www.pittstate.edu/office/budgetBudget Transfer Form – transfer between 104 & 105 onlyFringe Benefit Rates – current and next FYBudget CalculatorClassified, Unclassified, Students, Graduate AssistantsBudget less FringesEDC’s
24. 24Reports AvailableGUS & Axe LibraryAnnual Operating BudgetsBudget RequestBudget Office ResourcesPosition Tracking HistoryAnnual Budget Comparisons
25. 25PSU FundsPSU FundsState Appropriation – Fund 104General Fees Fund – Fund 105College Work Study – Fund 106Restricted Fees Fund – Funds 241 and 341University Federal Funds – Fund 351Foundation Funds – Funds ending in 42 (e.g. 342)
26. 26PSU FundsAuxiliary FundsStudent Health – Fund 203Housing – Fund 201Parking – Fund 207Local FundsStudent Center – Funds 208 and 209Service ClearingPrinting, Postal, Phone – Funds 107,108,109,110,111,112,114
27. 27PSU FundsPaying payroll from fundsCan not pay from Foundation funds or Local fundsNeed to pay from a restricted fee accountReimburse restricted fee account by using a DPR to move funds from the Foundation or Local Fund.College Work Study
28. 28Block Grant FundingPrior to FY 2002, the Governor and Legislature established state university budgets using the general use model (SGF appropriations and tuition revenues)General use model – each institution’s budget was established by increasing its general use base using a uniform set of parameters (% for salary, OOE and enrollment adjustment)The amount of SGF required for each budget depended upon the amount of tuition generated by each institution. SGF and tuition revenue was interchangeable, and tuition monies were considered a state asset rather than an institutional asset.Placed a higher percentage of state funding at smaller institutions having relatively low levels of tuition income.General use model did not provide any of the institutions or the KBOR with the flexibility needed to more effectively manage resources and respond more rapidly to change.
29. 29Block Grant FundingIn October, 2000 the KBOR approved a new budget model called the operating grant/tuition ownership model, under which each university would receive a state operating grant and would retain ownership of an accountability for its tuition revenue.Each university would receive an operating grant based on a request determined by the Board.Under the Board’s approval of tuition rates, each university would assess, collect and have expenditure authority over its tuition revenue.
30. 30Block Grant FundingThe Governor adopted the new budget model for the FY 2002 budget and declared that all budgets should be developed using the operating grant model.The Governor removed the historic expenditure limitations on tuition funds, thus opening the door for tuition ownership.The 2001 Legislature gave tacit approval to the new budgeting model by endorsing the Governor’s recommendations regarding tuition funds.For FY 2003, the Board deviated from the original plan by requesting the operating grant increase be appropriated to the Board for distribution, rather than appropriated to each university.
31. 31Block Grant FundingPerformance AgreementsSenate Bill 647 was signed into law in 2002 and established Performance Agreements for Kansas public postsecondary education. Effective July 1, 2005, receipt of new state funds by each institution shall be contingent on achieving compliance with its performance agreement. Board action is taken in June of each year for funding for the new fiscal year.Performance Agreement available on the Provost’s web site: http://www2.pittstate.edu/admin/provost/documents/PerfAgrmntCY08102007Oct22.pdf
32. 32Block Grant FundingPerformance Agreements & FY Funding7/1 – 12/31/2004 (pilot program) – FY 20061/1/2005 to 12/31/2005 – FY 20071/1/2006 to 12/31/2006 – FY 20081/1/2007 to 12/31/2007 – FY 20091/1/2008 to 12/31/2010 – FY 2010 to FY 20121/1/2011 to 12/31/2013 – FY 2013 to FY 2015
33. 33Impediments to Implementation of Operating GrantsNot established in statute – established by agreement and by repeated and consistent application in developing budgets.Condition of state finances has not permitted the Governor to recommend nor the Legislature to appropriate an increase to the Universities’ operating grants. Unfunded mandatesFringe Benefit changesClassified Pay PlanGlobal expenditure reductions (travel & equipment purchases)
34. 34Pittsburg State UniversitySupervisory TrainingManagement Level SupervisorsBudgeting 101Michele Sexton, Director of Budget & Human Resource Services 620-235-4188 (msexton@pittstate.edu)Lauren Werner, Assistant Director of Budget 620-235-4105 (lwerner@pittstate.edu)204 Russ Hall(August 1, 2013)