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Department Budget Process

Each department at the university is responsible for building its own budget, taking into consideration the original base budget document, resource allocation memo and various other budget transfers allocated at the unit and divisional level.

Departmental budget cycle

There are two main phases of the departmental budget cycle:

  1. Planning phase: This phase identifies the goals to be attained in the upcoming fiscal year and the financial plan necessary to achieve them.
  2. Operations phase: This refers to the performance of actual revenue and expense to the budget.
Departmental budget cycle

The operations phase includes implementation and monitoring. Implementation is recoding budget in Finance Systems General Ledger and monitoring is comparing budget to actual revenue and expenses and investigating variances. The planning phase includes planning and development. Planning is developing goals and objectives and development is estimating cost of attaining goals and project revenues.

Calculating department budgets

The total budget available to your department is calculated automatically on the multi-budget screen in the Financial Information System (FIS or Oracle), using the following formula:

  1. Add the original budget as approved by the Board on May 1, including base reductions
  2. Add or subtract resource allocation transfers (base and/or one-time only funds) from divisional heads
  3. Subtract base budget reduction
  4. Add or subtract other budget (base and one-time-only) transfers within the university
  5. Add additional transfers, if applicable

This will equal the total budget available to your department.

Departmental budget manager responsibilities

If you manage a department budget, you’re accountable for the financial integrity of your departments. It’s important to pay careful attention to your unit’s budgets in the Financial Information System (FIS or Oracle) (opens in new window)  as it is your responsibility to review budget accounts on a regular basis to ensure expenses are properly recorded and that they do not exceed your department’s allocated budget.

Some of the financial activities you might engage in include:

  • requesting and/or approving budget changes
  • requesting and/or approving transfer requests
  • approving transactions and payment requests.

All transactions must be processed in compliance with the university’s policies and procedures.

Here are some best practices to adhere to when implementing and monitoring department budgets:

  • Set up line-level budgets
    • When doing so, consider your departmental strategy for the year and how financial resources will be deployed to deliver the strategy
  • Monitor budget to actual and evaluate financial performance on a monthly basis
    • Run the following reports in the financial system (XML reports can be published in Google Sheets):
      • RU Revenue/Expense - 3 Selection (all CC) (summary report) or TMU Revenue/Expense - 3 Selections - XML
      • RU Budget GL Details Report (shows budget details) or TMU Budget GL Details - XML
      • RU Actual GL Details Report (shows the actual revenue and expense details) or RU Actuals GL Details Report - with PO number - XML
      • RU Commitment Detail Report (show the non-salary encumbrance details)
  • Prepare a monthly salary and non-salary reconciliation
  • Review encumbrances monthly, both salary and non-salary
  • Ensure all expenditures are accurate
  • Review, report and resolve discrepancies immediately
  • Check to see that funds have been transferred as promised
  • Review financial status on a regular basis
  • Communicate budget to actual variances with the individuals responsible for the management of the funds on a monthly basis to assist in the understanding of the department’s financial health

When delegating your approval authority for a department budget you manage, you must ensure your designate understands the approval requirements and uses sound judgment to protect departmental resources.

Even though you may temporarily delegate tasks and duties, you retain ultimate accountability for how a budget is managed. In the event of your absence, your designate must have written authorization from you and/or authorization granted to them in the financial system. Temporary and permanent delegation processes are outlined in the Delegation of Financial Signing Authority Procedure.

When submitting paper requests during your absence, your designee must attach a copy of your written authorization. Whether provided on a paper document or electronic submission, your approval means you have reviewed and are accountable for the expense.