5.0 BUDGETARY ACTIVITIES
5.1 BUDGET POLICY
All revenues and expenditures of the College will be recognized as part of a formal annual budget. Budgets for state appropriated accounts will conform to the College’s campus allocation by BHE as part of the state’s annual budget process. Budgets for trust funds will comply with this procedure and be approved by the Board of Trustees.
The purposes of this manual are to define the procedures, responsibilities and controls for the:
1. Annual budget process for state appropriated funds
2. Annual budget process for trust funds
3. Budget adjustment procedure
4. Mid-year budget review procedure
5. Budget reporting and control procedure
5.3 BUDGET PERIOD
The budget period of the College is the fiscal year. Each fiscal year begins on July 1, and ends on June 30, of the following calendar year.
5.4 ANNUAL BUDGET
A budget is a managerial tool used to estimate and project revenues and expenditures for a given period. The budget serves as a basis for planning fees, monitoring the fiscal status of trust funds and presenting the sources and uses of funds in the trust fund. The approval of the annual budget authorizes the College to implement fees as stated and to oversee activities as planned. Due to the wide range in size and scope of the college’s funds, it is inappropriate to place absolute limits on variations from budget, however, any significant variances from the approved budget will be identified and the office responsible asked to explain the variance.
The process for appropriated funds starts with a Board of Higher Education budget proposal that is submitted to the Governor in December. The Governor is required by statue to present a balance budget proposal by the end of January. The Governors Budget is referred to as House 1. During the months of February through May the House of Representatives presents a budget, referred to as House II, and the Senate presents a budget. The House and the Senate debate the budget versions during conference committee meeting and then produce a comprise budget to the Governor for approval. The Governor then has the authority to approve or veto sections of the budget. The budget that leaves the Governors desk is the final version. At that point the Board of Higher Education evaluates the funding that has been approved and notifies the campus of their share of the funds. The amount of state appropriated funds approved in the state budget is incorporated in to the college’s operating budget. The operating budget is approved by the College Board of Trustees and then sent to the Board of Higher Education as a point of information.
Beginning in November Divisional Focus Meetings are held , the agenda of the meetings are to discuss: new iniatives ,personnel requirements, equipment needs, capital renovations/improvements and previously funded projects as they relate to strategic priorities.
The budget guidelines are distributed to budget mangers along with current budget reports for reference. Budget proposals are returned to the Division head for review and consideration. In January Divisional Priorities are distributed to the Executive leadership Team for discussion. In February all divisions forward their division budget by department to Fiscal Affairs. Fiscal affairs staff prepares the budget files and performs analysis of the data submitted. The Executive Leadership team, consisting of the President and four division Vice Presidents will review the data and come to consensus with regard to funding of new initiatives, the position budget, revenue enhancements and operational reductions. During the month of May the Vice President of Fiscal Affairs presents the draft budget to the Finance and Facilities sub-committee of the Board of Trustees for approval. The final budget including requests for new or increased fees, are brought to the full board for final approval in early June.
This applies to all funds except the Resident Halls Trust Fund. The MSCBA has oversight and rate setting responsibilities over the resident halls. The MSCBA budget and rate setting schedule requires budgets be prepared and submitted in the Fall for the next academic year. The annual budget for the Residence Halls are approved by the MSCBA in January and sent to the College’s Board for informational purposes.
5.4 APPROVED UNIT OPERATING BUDGETS
After all trust fund budgets are approved by the Board of Trustees, the approved budgets are entered into the COLLEAGUE system budget module. Reports described in 5.8 BUDGET REPORTING AND CONTROL PROCEDURE will be distributed to the responsible area Vice Presidents.
5.5 BUDGET TRANSFER AND CONTROL POLICY
In order to assist in the control of expenditures against budgets as managed jointly by Budget Managers and the Finance Office, the following policies are in effect, in regard to expenditures against approved departmental budgets.
No expenditures will be made against any account that does not have an associated budget. Expenditures requested to be charged against an existing budget account (for example: 1-300-400-BBB02) will only be honored if there are sufficient unencumbered funds available in the budget, with the following exception:
-In the event an object account (in this example BBB02) will not be overspent by more than 10%, and there are sufficient other funds in the same subsidiary account (in this example all other BB accounts in the same budget), then a purchase request will be processed. However, it is the responsibility of each Budget Manager to request an appropriate (on-line) budget transfer for each such instance in order to balance these allowed over expenditures with other available funds.
-Establishment or increase of a budget line through the transfer of approved budgeted funds from another unit requires the approval of the Budget Manager and the Vice President of Fiscal Affairs. In addition, any transfer of budgeted funds in excess of $1000 will require the approval of the area vice president. No changes will be allowed in reallocation of budgeted funds from the following subsidiary accounts:
- AA Full time employees
- DD Fringe benefit expenses
- Funds may be transferred from all other subsidiary accounts from unencumbered budgets, with approvals as noted above. Transfers into subsidiary KK will also require the approval of the appropriate area vice president.
- Area vice-presidents may, at their discretion, request the establishment of a budget account from other unencumbered budgeted funds to serve only for those instances when emergency unanticipated expenses can not be met by transfer of budgeted funds within a department.
5.6 MID-YEAR BUDGET REVIEW PROCEDURE
This section describes the procedures to be followed for the mid-year review of all College budgets. The purpose is to examine year-to-date results and make appropriate adjustments to revenue and expenditure forecasts.
1. In December of each year the Vice President of Fiscal Affairs shall initiate the review process. The Division Vice Presidents will be asked to review their approved budgets - state or non-state - and request any adjustments that may be warranted by changing conditions.
2. The Vice President of Fiscal Affairs shall compile approved mid-year budget change requests and compare to the approved budgets. Any significant changes in revenues or expenditures shall result in proposed revised trust fund budgets. Such revised budgets will be submitted to the President for review and approval.
3. After review and approval, as required, revised budgets will be prepared and distributed to area Vice Presidents for distribution. The revised budgets will reflect all approved changes in revenues and/or expenditures. Those revised budgets will govern spending for the remainder of the fiscal year.
5.7 BUDGET REPORTING AND CONTROL PROCEDURE
An important management control tool over the College’s operations is provided by the operating budget. It serves as a basis for planning fees, monitoring the fiscal status of operations and presenting the sources and uses of funds available to the College
In order for the budget tool to be effective, College and operating unit administration need timely and accurate information on the results of operations. This section provides the framework for timely reporting and control of results of operations compared to the approved budgets.
All budget activity is processed through the College’s COLLEAGUE system. All budget reports can be generated by budget managers (on-line), as follows:
a. Unit reports showing approved budget, expended this month and year-to-date, encumbered amounts and amounts available to be expended. The reports are in subsidiary and fund order so show the complete fiscal status of a unit at a point in time. In addition, object codes where expenditures exceeded approved budget amounts are indicated so that fiscal and unit administration can identify areas needing budget attention.
b. Fund reports showing amounts expended from each source of funding at the College. These reports provide the basis for reporting to the Board of Trustees for trust fund expenditures compared to Board-approved amounts.
c. Unit reports showing open requisitions and purchase orders to keep units informed as to the status of their purchasing actions.
d. A Treasurer’s Over Budget Warning Report that identifies all those accounts where amounts expended and/or encumbered exceed approved budget limits. This report is a valuable oversight control tool and is used to review budget allocations, transfer amounts as required and identify situations where additional fiscal or other administrative attention is required.