Presentation Transcript

1. Institute for Academic Leadership

   Effective Fiscal Management Dr. Johnny L. Pherigo Department of Music University of Central Florida June 5, 2012 Howey-in-the-Hills, FL Money cannot buy happiness, but it makes misery more bearable
2. Basic Principles Regardless of the funding source, all money in your department is legally the property of the university/state. The department chair has fiduciary responsibility for all money that moves into and out of the department. State laws as well as university finance and accounting policies & procedures must be followed. Money is your most fungible resource in that it allows you to acquire faculty, staff, time, infrastructure, equipment, etc., in order to advance your unit’s mission and goals: Integrity is doing the right thing even when it hurts and no one is watching.
3. Common Types of Accounts Educational & General (E&G) Foundation Contracts & Grants Student Fees Auxiliary/Agency Each type of account or department has its own funding source, expenditure restrictions, and policies.
4. Educational & General (E&G) Source: State appropriations, tuition, lottery funds Salaries/Benefits OPS (Other Personnel Services) Operating Expenses (OE) OE Allowed Uses OE Non-allowed Uses Photocopying Food (except travel related) Travel Alcohol Equipment Entertainment Telephone/Fax Flowers Postage, office supplies Hotel (except travel related) Facilities maintenance Generally must be spent in fiscal year distributed
5. Foundation Accounts Funding Source: Charitable gifts Account Types Non-endowed Endowed Original Corpus must be preserved Spendables vs. Non-spendables Annual income based on return-on-investment Allowed use/Restrictions Memorandum of Understanding (MOU) “Unrestricted” Foundation accounts can be used for virtually any expenditure that can plausibly support the mission and goals of the department; e.g., food & alcohol. Accessing the funds Direct purchase Reimbursement
6. Contracts & Grants Sponsored projects/contracts and grants – must meet general and specific requirements as set forth by the contractor/grantor. Legally the funds belong to the university, not the Principal Investigator (PI); you have a fiduciary responsibility to ensure the funds are used appropriately. A portion of the Indirect Costs recovery (overhead) may be distributed to the department and available to support other faculty research. Allowed Not Allowed (usually) Salaries Entertainment Research/office supplies Food/alcohol Travel Gifts/personal items Research facilities
7. Student Fees Materials & Supplies (m&s) Fees: assessed per student per course to pay for materials & supplies consumed during the course that are not practical to require students to purchase individually Sheet music for ensembles Course-related photocopying, including exams Laboratory supplies for science lab Food for culinary class Equipment Fees: assessed according to declared major; used to purchase and maintain durable equipment for student use in that major Student computer labs Computer software Equipment maintenance & repair (student use only) Durable equipment Generally must be spent in semester or year collected Allowed uses according to original approved course fee application form Meticulous accounting/stewardship required
8. Auxiliary/Agency Accounts Source: generated (earned) revenue from departmental business-related activities Admission to music, theatre, or art events Revenue generated by on-campus workshops or conferences Revenue generated off-campus by student or faculty groups Can be carried forward to next fiscal year Expenditure should be related to or in support of activity that generated the income. Allowed Uses Any E&G allowed use Food associated with event for which admission is charged Non-Allowed Uses Flowers Gifts Alcohol
9. Getting Help Departmental accountant Trust but verify Training & supervision College accountant/budget dean Keep communication open The first place to ask questions or for help Finance & Accounting They know the rules Keep them on your side Audits
10. Overspending your E&G Budget The dean must make up your overspending from somewhere else, creating problems. You lose credibility and goodwill that you might need later. Chronic overspending will cause you to be replaced. Character is built by experience; good character is built by bad experience.
11. Underspending Your E&G Budget You have squandered the opportunity to do something good for your program, faculty or students. You have shown the dean you don’t need all the money you are receiving.
12. Management Spend all of your E&G and student fees money, but get good value for it. Auxiliary/Agency & Foundation money can be carried forward to next FY. Track budgets carefully, especially at the end of the fiscal year Learn how to run and read expenditure reports Encumbrances—make sure they are released when payment is made Keep your own estimates of revenue from student fees & compare them to what you receive Use transfer of charges between accounts to smooth out deficits and surpluses Have a plan for using surplus E&G funds at end of FY (e.g., office supplies, equipment)
13. Transferring Money vs. Transferring Charges Money can be transferred between like types of accounts (E&G to E&G) but not between different types of accounts; e.g., student fees to E&G or vice versa. You discover you have a surplus (or deficit) in your OPS account. Transfer money to (or from) your OE account. Charges can be transferred between different types of accounts providing the charge is an allowable expenditure in the type of account to which you are transferring. You need to buy course materials before the semester begins but your M&S fees account will not be funded until students pay their fees/tuition. Buy the materials from your OE account. Once your M&S fees account is funded transfer the charges from OE to M&S.
14. Asking Your Dean for Money Contrary to what you thought as a faculty member, your dean does not have a room full of money. Never request total funding for a project; show how you can raise most of the money yourself and ask the dean to help seal the deal. Emphasize how the project supports the mission of the college as well as the department. Have a realistic budget and don’t low-ball the costs. Be very clear about recurring and non-recurring expenses. Develop and use multiple revenue streams. Be on the constant lookout for possible internal and external funding sources for your projects.
15. Dealing with Budget Cuts Don’t panic The reality is seldom as bad as you fear it may be Keep faculty/staff informed but do not unnecessarily alarm them Be attentive Stay informed about state and university fiscal developments Monitor your departmental accounts Plan for contingencies Have at least some idea of how you may respond to certain scenarios Keep your response options open Prioritize If everything is a priority then nothing is a priority If possible, engage faculty/staff is setting priorities/values At every level, true values and priorities are revealed by how fiscal resources are allocated.
16. Case Study 1 Problem: Your operations account is inadequate for purchasing durable equipment needed by faculty and students. Solution: Student Equipment Fee
17. Case Study 2 Problem: Materials & supplies necessary for your courses are killing your operations budget. Solution: Student Materials & Supplies Fees
18. Case Study 3 Problem: Budget cuts have squeezed your operations account to the point you cannot fund faculty travel necessary for their research/creative activity assignment. Solution: Indirect Costs Recovery Generated revenue (auxiliary funds) Office of Research and Commercialization
19. Case Study 4 Problem: How do you support student group travel to present at an international conference? Solution: Student contributions Auxiliary Funds Student Government Association Departmental funds College funds Provost funds Undergraduate Research Travel Funds