IV:04:03 Budgetary Accounting Controls
Middle Tennessee State University operates under the authority of the Tennessee Board of Regents (TBR) and follows the fiscal policies and procedures set by that Board. Although the University receives its state appropriation as a direct item from the State Legislature, its operating budget must be approved by the TBR.
I. UNIVERSITY BUDGET
The University budget covers a fiscal year from July 1 of one year through June 30 of the following year. Preparation of the budget involves three submissions:
A. Request for State Appropriation. State appropriations to educational institutions are based on requests submitted in accordance with a formula developed by the Tennessee Higher Education Commission. Formula instructions are usually received in August each year for requesting state funds for the following fiscal year. The formula allocations are based on enrollments, square footage of floor space, and other data. The Higher Education Commission consolidates these submissions to support their request to the state legislature for appropriation of state funds.
B. July Budget. Detailed operating budgets are submitted to the TBR in May of each year for approval at the June Board Meeting. These operating budgets request funds for each departmental budgetary unit. The operating budget, when approved by the TBR, Tennessee Higher Education Commission, and Department of Finance and Administration, goes into effect on July 1 of that year. Upon final approval, notification of the approved total allocation for the fiscal year is given to administrative heads along with approved salaries for all budgeted positions.
C. October Budget. Mid-year adjustments to the July budget are submitted for TBR approval in October of each year for approval at the December Board Meeting. The October budget goes into effect on January 1 of the fiscal year. Administrative heads are notified of approval in their monthly budget reports.
II. BUDGET ALLOCATIONS
The University budget is divided into various "indexes" which generally constitute a department or activity. For budget control purposes, each index number is considered separately. Each index number is assigned to one "responsible person" although any higher level official in the same organizational line may also approve or disapprove budget actions for an index. Each index budget is divided into the account codes listed below. The amount allocated for each account code is the amount planned to be spent (or obligated) during the period covered by the budget.
A. All Salaries - Use the same account codes as actual expenses
B. Employee Benefits Budget Pool - 62000
C. Travel Budget Pool - 73000
D. Operating Expense Budget Pool - 74000
E. Electricity - 75110
F. Water and Sewage - 75120
G. Storm Water User Fee - 75125
H. Natural Gas - 75130
I. Fuel Oil - 75150
J. Other Utilities and Fuel - 75190
K. Allocated Departmental Charges - 75300
L. Departmental Revenues - 75400
M. Capital Expense Budget Pool - 78000
N. Scholarships and Fellow Budget Pool - 79000
O. Transfers - Use the same account codes as actual expenses
Although funds are budgeted in account code pools, actual expenditures are always recorded by detailed account classifications. A list of all authorized account codes and a description of each is included in the Banner Account Codes Reference Guide located at MTSU Business Office.
The responsibility for insuring that all expenditures remain within the amounts budgeted rests with the administrative head of the unit to which funds have been allocated. Final budgetary responsibility rests with the heads of each administrative division:
Business and Finance
Information Technology Division
Marketing and Communications
III. MONTHLY REPORTS
After the close of each month, the Business Office will send an email to "all subscribers" announcing budget reports and salary reports are available via eprint.
The FZRBDSC "Budget Status" report contains a summary of amounts budgeted, expended and committed by account code. The "Available Balance" is the current revised budget amount less fiscal year-to-date expenditures and unpaid encumbrances. Over-expenditures in an account code will appear as a negative amount in the column headed "Available Balance." Pooled budgets (Employee Benefits, Travel, Operating, Scholarships) should be monitored on the "Total" line to determine over-budget status. The "Net" line at the end of the report generally appears as a negative number in all columns. This is normal and should be read as positive numbers. Generally, if the "Net Available Balance" is positive, there is an over-budget condition for the entire index.
The unpaid encumbrances are listed in the column headed "Budget Reservations." Encumbrances consist of outstanding purchase orders and obligated salaries. The budgetary head should verify that all commitments listed are still outstanding and are obligations of the department. A detailed list can be viewed on the FZROPNE_INDEX_SORT eprint report. Departmental records should be reconciled monthly to the "Budget Status" (FZRBDSC) and "Open Encumbrances Report by Index" (FZROPNE_INDEX_SORT) reports.
The FZRODTA "Organization Detail Activity" report lists each transaction made to each account during the month. The budgetary head should check this report promptly and notify the appropriate administrative department of any discrepancies. Charges for services and/or materials provided by departments such as Printing Services, Motor Pool, Bookstore, Photographic Services, Telecommunications, and Physical Plant will be charged directly to the departmental accounts after the service or material is delivered.
The NZRBUDG "Salary Budget Report" lists the amounts budgeted in each authorized position within the department's accounts, the current encumbrances (obligations), and expenditures charged to each position. Salaries of regular full and part time employees are budgeted by position number, so over-budget conditions in individual position numbers can be monitored. Group positions (i.e. overtime, adjuncts, extra compensation, summer school, etc.) are budgeted on finance only. These budgets and actual expenses will appear on the FZRBDSC "Budget Status" report.
The following items on these reports should be given particular attention:
A. budget revisions have been entered
B. expenditures listed were properly chargeable to the account
C. budgets have not been over-expended
After the Salary Budget Report has been reviewed, the budgetary head should date and sign the report. Copies should be maintained in the department for six months after the end of the fiscal year.
IV. BUDGET REVISIONS
(Forms and instructions for preparation may be obtained from the Budget and Financial Planning Office or from the website http://www.mtsu.edu/budget/).
Occasionally, it may be necessary for the budgetary head to request revisions in the department's budget. Budget revision requests can be made on Request for Budget Revision forms. If the budget revision involves several different departments, a spreadsheet with the appropriate information can be attached to the Request for Budget Revision form. Budget Revision forms are to be signed by the appropriate approving authority as follows:
A. Revisions within an index are properly authorized when signed by the responsible budgetary head.
B. Revisions between indexes are properly authorized when signed by the responsible budgetary head and the next higher level of authority (normally a Dean or Vice President).
C. Revisions within or between indexes where the responsible budgetary head is the President or a Vice President are properly authorized when signed by the responsible budgetary head.
D. Revisions shifting funds between administrative divisions are properly authorized when signed by the Vice President of the division decreasing the budget and the President. The President's approval may be in the form of a memorandum, contract, or other document that supports the budget revision.
E. Revisions creating a new, regular personnel position that increases the total position count are properly authorized when signed by the Vice President and the President.
After approval, the Budget and Financial Planning Office will assign a Budget Revision number (BRxxxx) and enter the revision into the Banner Finance and/or Human Resource system. Copies of the form with an indication of the action taken will be returned as early as possible to all persons concerned via email.
V. BUDGET OVERDRAFTS
The over-expenditure of a budgeted account or position number is not recommended. It is the responsibility of the budgetary head to control funds allocated to them and to ensure that over-expenditures do not occur. Immediate action should be taken to correct any over-expended/over-obligated condition greater than $100 in an individual personnel position or account code.
VI. FISCAL YEAR CLOSING PROCEDURES
A. Requisitions for purchases must be in the Procurement Office by the deadline communicated via email each year so bids may be secured and purchase orders issued to insure delivery prior to June 30.
B. Prompt submission of expense items:
1. The designated personnel in each department must insure all invoices, payrolls, cash items, and travel accounts are turned in promptly at the close of the fiscal year.
2. Outstanding purchase orders on which delivery has not been made before June 30 will remain encumbered. Funds for payment of these outstanding purchase orders will be automatically carried forward to the next fiscal year.
C. Budget balances remaining at June 30 will be carried over to the next fiscal year as instructed by the President.
Revisions: June 1, 1993; August 30, 1994; May 28, 2004; July 21, 2005; July 12, 2010.