Managing fund balances entails knowing how much money you have, how much money you have spent and how much money you plan to receive and spend, then tracking and adjusting to make sure the money lasts. How you think about how much you have depends on the type of fund you have; sometimes it is the balance and sometimes it is the budget. Refer to the section Managing the Balance in Topic Overview: Life Cycle of a Fund for more information.
You may use either of the two reporting systems listed below for managing fund balances (Differences are noted in the guidance).
- If you use Commitment Management System (CMS) the reporting includes future projected balances by general ledger (GL) period, which include either hard commitments or optionally user-entered soft commitments.
- If you use Oracle Business Intelligence (OBI) Consolidated Expenditure Reporting (CER) Dashboard, you will need to manually complete all the following steps.
- For information about OBI, refer to OBI Financial Reporting.
The following guidance helps you take everything into account when managing to a budget.
Forecasting Future Expenditures and Available Balances
Stanford's stewardship responsibility demands prudent management of expenditures charged to funds:
- Ensuring they meet the fund's restrictions.
- Ensuring the goals contemplated when the budget was set (whether or not we are using sponsored funds) are accomplished.
Forecast future expenditures in order to determine if budgeted funding will last through the project period or fiscal year. This becomes more important the closer one gets to the end of the project period or fiscal year.
Review Actual Expenditures
- Review actual expenditures using OBI CER or Commitment Management System (CMS).
- Identify needed corrections and make a note of the effect. Follow up as needed to correct errors.
Review Commitment Data
- Refer to Topic Overview: Commitment Management to understand:
- Commitment types and their descriptions.
- Types of transactions for which commitment data is not included on Oracle Financials reports.
- Which Oracle Financials reports include commitment data.
- What report search criteria (dates or periods) to use to see commitment data on reports.
- Use CMS or OBI CER dashboard reports to review summary and detailed commitment data.
- Identify required corrections, if any. Make note of the effect and follow up to correct errors.
- Close purchase orders (P.O.s) that will have no more invoices to pay. Refer to How to: Finally Close a Purchase Order for more information.
- Suppress lingering purchasing commitments, line by line, that you do not expect to result in an actual cost. Refer to How to: View and Suppress Commitments on an approved purchase order for more information.
- Consider commitments that will not become actual costs in the projected period (for example, a P.O. related to a monthly payment that goes out beyond the fiscal year).
- Consider associated burden rates that should be applied to the estimated future costs (e.g., fringe benefits, indirect costs, etc.).
Estimate Future Activity & Other Costs
- Consider Commitment Data Not Included on Oracle Financials Reports (e.g., iJournals, Expense Requests, PCard, Feeder Journals) and estimate costs.
- Consider other commitment data not available on Oracle Financials reports (e.g., hourly wage payments, future planned vacation credits, additional recurring pay, etc.) and estimate effect.
- Consider other future planned activities (e.g., future hires, future salary increases, purchases that have not been initiated, future travel, etc.) and estimate costs.
- Consider average monthly operational costs not included in commitments.
- Consider associated burden rates that should be applied to estimated future costs (e.g., fringe benefits, indirect costs, etc.).
- If not already received, confirm that budgeted revenue is forthcoming (planned giving, promises of funding from other Stanford organizations, other anticipated revenue…).
Understand Remaining Balance Calculation
Review budget amount, actual expenditures, commitments and remaining balance calculation on OBI CER Expenditure Balance reports. Field descriptions are as follows:
|Budget Amount (A)||The amount entered in the University Budget Management tool as of September 1, adjusted for any iBudget entries, or the sponsored or capital budget, as appropriate.|
|(GL Period) Actual Expenditure Amount (B)||Actual expenditures to date (based on the beginning and ending periods requested, usually project-to-date or fiscal-year-to-date).|
|Expenditure Commitment Amount (C)||Expected costs associated with future transactions recorded by the Oracle Financials system.|
|Projected Remaining Balance Amount (A-B-C)||The amount budgeted less expenditures to date and outstanding commitments.|
The values for expenditures, budget and commitments that appear on Oracle Financials reports is based on the prompts (e.g., fiscal year-to-date, period-to-date or date range) and the award type entered. For a detailed explanation, refer to Resource: Understanding How Expenditure, Budget & Commitment Data Appear on Oracle Financials Reports.
Forecast Projected Remaining Balance
- Use Excel or other means to adjust OBI Projected Remaining Balance Calculation (Budget Amount – Actual Expenditure Amount – Expenditure Commitment Amount) by the effect of all expected future uncommitted transactions estimated above to produce calculated remaining balance.
- Determine the needed actions. Adjust plans based on calculated remaining balance (e.g., seek alternate funding or reduce future expenses if remaining balance is insufficient).
The CMS enables online access to all types of commitment data and provides an interface for users to forecast future expenditures and remaining balances. For complete details, refer to CMS.