Budget Planning and Monitoring for Income-††††††††††††††† UPPS No. 03.02.04

Generating Accounts††††††††††††††††††††††††††††††††††††††††††††††††††††††††† Issue No. 3
Effective Date: 04/21/2008
Review: November 1 E4Y

 

 

01.†††††† POLICY STATEMENTS

 

01.01The purpose of this UPPS is to establish procedures for

 

a.†† approving new income-generating programs and accounts,

 

b.†† establishing estimated income for income-generating accounts,

 

c.†† developing expenditure budgets, and

 

d.†† monitoring actual income and expenditures compared to budgeted.

 

This UPPS complements UPPS No. 03.01.09 regarding the fiscal responsibility of account managers.

 

01.02For the purpose of this UPPS, income-generating accounts are defined as accounts that are at least partially supported by sales and services generated by that account. This document does not address grant accounts.

 

Income-generating accounts include organized activities in support of instruction (such as the Child Development Center and the Speech/ Hearing/Language Clinic), service departments, and athletics, as well as other designated and auxiliary accounts with sales and services.

 

02.†††††† PROCEDURES FOR APPROVING OR DISAPPROVING INCOME- GENERATING PROGRAMS

 

02.01The Vice President for Finance and Support Services (VPFSS) must approve proposed income-generating activities. Criteria for approval include:

 

a.†† The activity is integral to and directly related to the fulfillment of the Texas State's educational, research, public service, or campus support function without regard to profit; or

b.†† The activity is needed to provide reliable goods or services on a consistent basis at a reasonable price, on reasonable terms, and at a convenient location and time; and

 

c.†† The activity is carried out for the primary benefit of students, faculty, staff, or constituency of Texas State but with sensitivity to the impact on the total community.

 

02.02If a vice president subsequently determines that a previously approved activity is not longer acceptable, the account manager will curtail its operations.

 

03.†††††† PROCEDURES FOR ESTIMATING INCOME

 

03.01For ongoing income-generating accounts, the Budget Office will, during the budget cycle review, provide income estimates based on prior years' data and any known current conditions.

 

03.02The account manager of the income-generating account should review the revenue estimate, comparing it to departmental projections. If that projection varies by more than ten percent, the account manager should consult with the Budget Director before suggesting revisions in the estimate.

 

03.03The Budget Director will review suggested increases and decreases and modify estimates, if mutually acceptable. Revenue estimates will then be compiled into a revenue schedule in the budget document.

 

03.04Account managers contemplating an increase in fee or charges to students or customers for an upcoming fiscal year must have those increases approved by the divisional vice president and submitted to the Budget Office prior to January 15 of each year. An account manager may increase fees or charges only at the beginning of a fiscal year unless the divisional vice president gives authorization for another date.

 

04.†††††† PROCEDURES FOR DEVELOPING EXPENDITURE BUDGETS

 

04.01Budgeted expenditures should reflect all expected and necessary expenditures.

 

a.†† The account manager should seek participation and input from personnel most closely associated with the income-generating activity.

 

b.†† Expenditure budgets should not necessarily be tied to the programís income estimate. Account managers should assess the need for a reserve, contingency fund or institutional expectations for contributions to support other budget areas.

 

c.†† Unless another funding source is specifically identified in the budget, expenditures may not exceed the revenue estimate.

 

d.†† An account manager need not budget projected expenditures for facilities construction, renovation, or modification, or transfers from reserves for program enhancement in the regular operating account. However, the development of annual income and expenditure projections should include the need to transfer funds to plant funds or reserves for such needs.

 

05.†††††† PROCEDURES FOR MONITORING BUDGET COMPLIANCE

 

05.01The account manager is primarily responsible for monitoring budget compliance, ensuring that accounts are within budgetary limits.

 

The VPFSS or other vice president may require budgets of estimated income and expenditures as well as comparison of actual income and expenditures with budgeted for selected accounts on a month-by-month basis (or other interval). Selection criteria will include dollar magnitude of income and expenditures, changes in operation, and past fluctuations or variances.

 

05.02Account managers are expected to make as many mid-year adjustments to expenditure budgets as necessary to balance the account or secure approval for alternate funding sources via the respective vice president.

 

05.03Account managers whose accounts have negative variances exceeding 10% of budgeted amounts for the just-completed fiscal year will submit explanation and action plan to the VPFSS by September 30 of the current fiscal year.

 

††††††††††† The University will hold account managers accountable for staying within budget. A vice president will consider replacing the account manager whose budget reflects negative variances exceeding 10% for two consecutive years.

 

05.04The divisional vice president will fund from another account any deficit where expenditures exceed budget or exceed actual income, unless waived by the President's Cabinet. Before granting a waiver, the President's Cabinet must identify a source of funds to cover the deficit.

 

05.05   The Budget Office will prepare an annual consolidated budget report of income-generating accounts, including explanations of significant variances and related action plans by November 15 of the following fiscal year.

 

05.06The VPFSS will review the consolidated budget report of income-generating accounts with the President.

 

06.†††††† REVIEWERS OF THIS UPPS

 

06.01Reviewers of this UPPS include the following:

 

Position†††††††††††††††††††††††††††††††††††††††††††††††††††††††† Date

 

Budget Director††††††††††††††††††††††††††††††††††††††††††† November 1 E4Y

 

07.†††††† CERTIFICATION STATEMENT

 

This UPPS has been approved by the following individuals in their official capacities and represents Texas State policy and procedure from the date of this document until superseded.

 

Budget Director; senior reviewer of this UPPS

 

Vice President for Finance and Support Services

 

President