The Management Series

1. Good Morning, and Welcome! The Management Series Brought to you by: The Training and Development Team Your NU Values Partners “Committed to understanding and delivering value-added customer service that contributes to our customers’ overall success”

2. THE MANAGEMENT SERIES Session VI Accounting & Budgeting Practices at UNMC April 8, 2005 Facilitated by:

3. Agenda 8:00 Introduction – Rod Kelly 8:05 Campus Leader – Donald S. Leuenberger 8:30 Budgeting Practices – Susan Kraft Mann 9:30 Accounting Practices – Bob Lindberg 10:00 Break 10:15 Internal Control Awareness – Carol Kirchner 11:00 Business Systems and On-Line Resources – Carol Kirchner 11:45 Wrap up and Adjourn

4. Campus Leader DONALD S. LEUENBERGER Vice Chancellor for Business and Finance

5. UNMC The Management Series Budgeting Practices by Susan Kraft Mann

6. University budget and salary increases • Costing and analytical projects

8. Budgeting 101 • Key Elements • Revenue • Expenditures

9. Revenue/Funding Sources • General Fund:  State tax revenue allocated to the University. • Cash Funds:  Derived from tuition, fees, clinic patient revenue, and other miscellaneous income. • Federal Funds:  Federal funds include federal grants and contracts plus student aid programs supported from federal funds. • Revolving Funds:  Self-generated from departmental sales and charges. • Auxiliary Funds: An auxiliary enterprise is an entity that exists to furnish goods and services to students, faculty, or staff and charge a fee directly related to its operations. (Examples include student housing, bookstore, etc.) • Trust Funds:  State and private gifts, grants and contracts, non-federal student aid programs, etc.

10. University Revenue Budget by SourceJuly 1, 2004

11. UNMC Revenue BudgetJuly 1, 2004

12. Salaries Faculty Administrative Managerial/Professional Clerical/Service Other Academic Students Other Benefits Operating General Supplies Travel Capital Outlay Expenditures

13. University Expense Budget by Campus,July 1, 2004

14. Nebraska Legislature • One of A Kind • Unicameral • Non-partisan

15. State of Nebraska Budget Process • NE authorizes a Biennial Budget (2 year) enacted during regular legislative sessions held in odd-numbered years (long sessions, 90 days) • UNMC sends salaries, operating and capital recommendations to Central Administration • Central Administration compiles campus budget requests into one request and submits to the University President • University President recommends salaries, operating and capital needs to the Board of Regents

16. State of Nebraska Budget Process (cont.) • Once approved by BOR and President, Central Admin submits to Department of Administrative Services (DAS) by Sep 15 • September to January - Fiscal Office reviews and analyzes all budget requests for the Appropriations Committee of the Legislature; DAS reviews and analyzes budget requests for the Governor • Jan 15 - Governor's budget proposal due • January & February - Appropriations Committee works w/ Legislative Fiscal Office to develop preliminary recommendation based on current revenue forecasts from the Nebraska Economic Forecasting Advisory Board (NEFAB), tax rate assumptions and compliance with statutory reserve requirement

20. State of Nebraska Budget Process (cont.) • March – Public Hearings • April – Appropriations Committee reviews information from hearings and other info; makes recommendation to full legislature in the form of budget bill • Late May – Once Appropriations bill has passed and is sent to the Governor, Governor has five calendar days (excluding Sundays) to sign, not sign, veto in total or line-item veto items of appropriation. Within one day of the return of appropriation bill to the Legislature with line-item vetoes, the Appropriations committee must report on the impact of the vetoes and may offer a motion to override the total or part of the line-item vetoes.

22. UMMC’s Annual Budget Process • Balance units • Balance revenue to expenditures • Balance campus to central Administration

23. UMMC’s Annual Budget Process (cont.) • Budget and Salary Guidelines • FY 2004-05 Salary Guidelines • Managerial/Professional Salary Structure • Over-budget? Under-budget? • How long should you keep records? • Budget Reductions • PSL and SAP and NuLook • Budgeting for Public, Not-for-Profit Institution vs. Private Corporation

24. Budgeting Practices Class Exercise

25. What else does the Budget Office do?

26. Costing and Analytical Projects - Recurring • Quarterly Financial Statement Reviews • FM&P Utilities Rate Analyses (Steam, Chilled Water, Electricity, Recycling) • Student Health Fund B Analysis • TNMC Support Services Contracts • Unrelated Business Income Tax • Tuition & Remissions Analysis

27. Costing and Analytical Projects – Recurring (cont.) • Legislative tracking • Strategic Planning Booklet • Indirect Cost Analysis and Distribution • Tobacco Settlement Analysis and Distribution • Programs of Excellence Analysis and Distribution • Faculty Diversity Analysis and Distribution

28. Costing and Analytical Projects – One-time • Information Technology • Continuing Education • Alumni Affairs • Biomedical Communications • College of Dentistry Dental Clinics

29. UNMC The Management Series Accounting Practices by Bob Lindberg

30. Accounting Frontier

31. Cost Center

32. WBS Elements

33. G/L Account (Cost Element)

39. Document Type A two-letter identifier that characterizes the type of financial transaction being performed. The document type controls the assignment of the document number as well as subsequent processing of the document. For example, the document type differentiates between a Journal Entry (JE) and a Cash Receipt (CR).

40. Hints/Controls • Someone is RESPONSIBLE • Center Summary Section is key • On-Line offers Drill Down • What Then? • General Accounting for Cost Centers • Sponsored Programs Accounting for WBS • Contact Billing Dept or Imputer • ALL JE’s require backup • Auditors sample entries to verify • Cost Center & WBS Reports = UNMC Financials

41. FY 2005 Year End

42. FY 2005 Year End (cont.)

43. UNMC The Management Series Internal Control Awareness by Carol Kirchner

44. Objectives • Define risks and internal controls • Review the need for balancing risks and controls • Identify and review areas of responsibility and accountability • Provide managers with control tools and activities to put into practice • Introduce the “red flags” of fraud

45. Internal Controls • Process effected by people, designed to provide reasonable assurance regarding the achievement of objectives in the following categories: • Effectiveness and efficiency of operations • Reliability of financial reporting • Compliance with applicable laws and regulations

46. Risk • The possibility that an organization or an individual will NOT: • Achieve its goals • Operate effectively and efficiently • Protect itself from loss • Provide reliable financial information • Comply with laws and defined policies

47. Balancing Risks and Controls Reasonable Assurance Risks Controls

48. Excessive Risks Loss of Assets, Donor or Grants Poor Business Decisions Noncompliance Increased Regulations Public Scandals Excessive Controls Increased Bureaucracy Reduced Productivity Increases Complexity Increased Cycle Time Increase of Non-value Activities Out of Balance

49. Responsibility and Accountability You can delegate some of the duties you are responsible for,but you can not delegate accountability!

50. Importance of Internal Controls To mitigate risk that organizational objectives will not be achieved