Finance 501: Budget Management

Purpose

To provide departments with guidelines on budget management 

Reference

Board of Regents Policy and Regulation 05.01.01 & 05.02.05 Statewide Accounting Manual P-82

Definitions

Budget: The amount of revenue and expense authorized to cover program costs or, alternatively, an annual operating plan expressed in fiscal terms.
Deficit:
A fiscal position where actual expenditures exceed available revenues. Deficit spending is a violation of BOR Policy.
Management Reporting:
A method of assessing a unit's fiscal status for the current fiscal year based on a projection of revenues and expenses. The report is used to calculate and anticipate a lapse, carryforward or deficit.
Major Administrative Unit (MAU):
The three major campus units, UAA, UAF and UAS are major administrative units. Each has authority to distribute budget to sub-unit levels.
Major Budget Unit:
A sub-unit of a major administrative unit such as a college or school.

Policy

General: Major budget units at the University of Alaska Anchorage MAU are provided a base budget each fiscal year, with authority to distribute the budget by line item as necessary to cover program costs. Both revenue and expense budgets are balanced at the major budget unit level. Major budget units are expected to be fiscally responsible for managing their budgets and ensuring that deficits do not occur.Unspent funds (carryforward) are returned to the major budget unit at the end of the fiscal year to be used at their discretion.

Management Reporting: During the fiscal year, units throughout the university system are required to periodically report on their fiscal status. General Accounting and Budget coordinates the management reporting process for UAA and provides training to new preparers. Management reports are required at the completion of the first and second quarters and monthly for the third and fourth quarter of the fiscal year. This reporting provides information so that administrators can take corrective action to prevent potential deficits or significant lapses and distribute contingency funds in accordance with needs and priorities.
Department management reporting responsibilities include:
  • Projecting both revenue and expenditures with accuracy.
  • Completing the projections within the scheduled time.
  • Reviewing the projections for errors or omissions.
  • Making efficient use of all program resources.
  • Taking corrective action to avoid bottom-line deficits by:
    • Limiting or curtailing expenditures.
    • Covering the overexpenditure from a separate org within the program.
    • Transferring the required budget from a separate org within the program.
  • Requesting advice from General Accounting and Budget if questions arise.
The following budget and management reporting forms are available on-line:Effective: 08/30/2005