new it managers program | budget and finance (separate registration required) (254741527)
TRANSCRIPT
8/9/2019 New IT Managers Program | Budget and Finance (separate registration required) (254741527)
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INTRODUCTION TO BUDGET AND FINANCE
Modified from a set by Chip GermanUniversity of Virginia
2015
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INTRODUCTION TO BUDGET AND FINANCE
FUN – da – mentals?
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Session Goals
▪ Common financial terms
▪ Typical b dgeting methodologies
▪ Cond ct a financial data!analysis e"ercise tos pport ma#ing a case
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OBJECTIVES OF BUDGETING, FINANCIALPLANNING AND REPORTING
▪ $ss re proper application of general acceptedacco nting principles %G$$&'
▪ $cc rately reflect the financial health of theinstit tion(
▪ )ffectively allocate* se and managereso rces(
▪ $ssist +ith acco ntability and reporting needs
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UNDERSTANDING FINANCIAL STATEMENTS
To learn abo t the formal financial reporting doneby non!profits %incl ding colleges and
niversities'* a helpf l reference,
http,--+++(acco ntingcoach(com-nonprofit!acco nting-e"planation-2
To see comple" e"amples,
http,--+++(virginia(ed -e"ecvp-reports(html http,--+++(baylor(ed -content-services-doc ment(php-2.25/.(pdf
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A SAMPLING OF COMMONFINANCIAL TERMS AND CONCEPTS
▪ General edger ▪ Chart of $cco nts▪ )nc mbrance
▪ iscal ear ▪ $ dit▪ 3iscretionary vs( 4on!discretionary )"pendit res▪ ponsored 6esearch Costs▪ Capital vs( 7perating 8 dgets▪ )ndo+ment
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GENERAL LEDGER OR GL
The General edger is the main acco nting recordand it incl des seven basic categories,
▪ $ssets▪ iability▪
7+ner9s e: ity▪ 6even e▪ )"pense▪ Gains▪ osses
The listing of elements %acco nt names' in the Gby +hich financial transactions are classified iscalled the Chart of Accounts (
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CHART OF ACCOUNTS
▪ The Chart of $cco nts is sed to classifyfinancial transactions* sing s chclassifications as f nd types* reven e-e"pense
categories* and asset-liability codes(
▪ )ach element in the classification system isassigned a name and a ni: e n mber by+hich it can be identified(
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ENCUMBRANCE
▪ $n enc mbrance is a designation in theacco nting system that sets money aside for aspecific f t re se( )nc mbrances maysometimes cross fiscal years(
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FISCAL YEAR
▪ $ fiscal year is the one!yearterm associated +ith anorgani;ation<s b dget( =t often does notcorrespond to a calendar year(
▪ Many fiscal years begin > ly 1 and end the ne"t> ne .0 and are named for the closing year* e(g(*?-1-1@ ! /-.0-15 is 15( or p blic instit tions*
fiscal years s ally begin and end in concert +iththeir respective state government<s fiscal years(
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AUDIT▪ The f nction of a dit in an acco nting conte"t
is to provide an independent assessment of afinancial system<s internal controls %ho+reso rces are directed* monitored* and
meas red' and to eval ate the validity andreliability of the information that systemmanages and prod ces(
▪ $n a ditor cond cts tests and renders opinionsbased on the res lts of those tests(
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DISCRETIONARY VS NON-DISCRETIONARYE PENSES
▪ Dis!"e#iona"$ e%&enses , the costs of thingsyo choose to do
▪ Non-'is!"e#iona"$ e%&enses , the costs of
things yo m st do %beca se of legislative orcontract al re: irements* for e"ample'(
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SPONSORED RESEARCH COSTS
▪ Costs of cond cting sponsored research arein t+o categories,
▪ 'i"e!# %s ch as salaries of those act allycond cting the research'
▪ in'i"e!# %s ch as the proAect<s share of
b ilding!operation costs and of the costs ofoperating the camp s net+or#'(
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CAPITAL VS OPERATING BUDGETS
▪ Ca&i#al( involves instit tion<s investments inassets li#e ne+ or replacement high!val ee: ipment-machinery* ne+ b ildings B maAorrenovations* comp ter hard+are* etc(
▪ O&e"a#in)( the means by +hich the instit tionplans for its normal* ann al operating
e"pendit res* incl ding those for personneland their fringe benefits and for each year<spayment on long!term obligations(
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UNIVERSITY BUDGETING METHODOLOGIES
▪ =ncremental
▪ 6esponsibility!-reven e!centered
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INCREMENTAL BUDGETING
▪ Most common in higher ed▪ 3ecisions made centrally* top!do+n
▪ C rrent b dget is baseD▪ =ncrementsD %salary changes* inflation*
approved percentage increases' are added to
b ild ne"t year<s b dget
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RESPONSIBILITY-+REVENUE-CENTEREDBUDGETING
▪ Gro+ing sage▪ Moves higher percentage of reven e B cost
o+nershipD from center to academic nits▪ Generally distrib tes t ition reven es to
schools B colleges based on their generationof reven es
▪ Uses s bventionD +hen needed
▪ $dditional central f nds sed to f nd ne+strategic initiatives
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BAYLOR S ANNUAL BUDGET PREPTIMELINEFOR FISCAL ./0 10+/+/2-2+3/+/04
▪ all 201@ E 6egents approve t ition* fees* B totalb dget for iscal 201/
▪ 11-.-1@ E 4otification of g idelines B d e dates▪ &hase 7ne,
▪ 11-2@-201@ E &ersonnel B capital b dgets d e▪ 12-5-201@ E Contract services b dget d e
▪ &hase T+o % ebr ary B March',▪ Ma#e net ;ero changes to b dget
▪ .-.1-2015 E inal b dgets d e▪ Mid!May 2015 E can begin sing ne+ b dget▪ /-1-2015 E 8 dget is no+ c rrent
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DATA ANALYTICS E ERCISE