Departments must develop annual fiscal year operating budgets for current, non-sponsored funds. Responsible financial management results in annual operating budgets that:
- are balanced (planned uses fully supported by identified resources)
- reflect decisions made during the annual budget development process
- identify annual financial plans by chartstring
- if necessary, reflect projected deficits
- include all anticipated resources and planned uses for the resources
Units must finalize and enter their budgets into the University financial system before the fiscal year begins.
Budgeted deficits at the Resource Responsibility Center (RRC) level should be avoided if possible. Any anticipated deficits at the RRC level or Fund-Z DeptID combination levels must be reviewed with the University Budget Office before being incorporated into the final budget.
The Board of Regents has final approval authority for the current operating budget.
Accountability for managing finances and budgets for the University rests with the leaders of the RRCs (the academic/administrative unit head: vice presidents, chancellors and deans). Within that structure, RRC chief financial managers (and their RRC financial contacts and financial managers if applicable), and the University Budget Office are responsible for direct oversight of current non-sponsored funds, ensuring that:
- year-to-date resources and expenditures are occurring in a manner consistent with the budget plans
- resource shortfalls and/or expenditure overruns are identified and addressed as soon as possible
- emerging or incurred deficits are identified, elimination plans are established, and incurred deficits are actively resolved
- appropriate budget adjustments are reviewed and entered into the University financial system
Throughout the fiscal year, financial managers must monitor resources and expenditures to determine whether the financial status for their chartstrings is on target or is changing significantly. If significant changes are detected, the underlying reasons for the changes must be identified and, if needed, appropriate corrective action must be taken.
Reason for Policy
The University is committed to effective resource management and accountability. Budgeting is not an end, in and of itself; it is a tool to help the University achieve its strategic goals by managing its financial resources more effectively.
All potential resources (including carry-forward, expected revenue for the fiscal year and transfers in) and all planned uses (including expenditures and transfers out) must be included in the budget for budget planning to be comprehensive and effective. By requiring that all current, non-sponsored funds be included for planning and budgeting, the University can better manage its resources and hold itself to a consistent standard of accountability regardless of the source of funding or category of expenditure.
Regents' approval enhances accountability, provides proper financial oversight and helps align the University's financial resources with its strategic goals.
Ongoing budget oversight ensures that resources and expenditures are occurring in general conformity with the budget plan.