Annual Budget Process
Annually in January, RAFA begins preparation on the next fiscal year’s budget for the Research area. The research area budget includes both Business area 0101 (general fund) and Business are 0201 (UKRF). For questions or help with the budget process, please contact:
|General Fund Budget||Judy Duncan|
|Gifts & Endowments||Judy Duncan|
|Salary Proposal||Toni Lynn Smith|
|Service Centers||Nancy Ison|
|UKRF Budget||Judy Duncan|
The basic steps in the budget process are:
- Budget Calendar: The Budget Calendar is issued by the University Budget Office (UBO). The Budget Calendar lays out the timeline for preparing the next fiscal year’s budget and identifies deadlines for submission of budget materials by RAFA. RAFA reworks the Budget Calendar to create deadlines for Research units so that departmental information can be compiled into all inclusive documents for the entire Research area. The adjusted Budget Calendar will be distributed to the Research units.
- General Fund & UKRF Income Estimates: The Research Fiscal Officer (RFO) prepares an Income Estimate shadow sheet and sends this to Research units. Research units complete the sheet by entering the next fiscal year’s income estimate including an explanation of increases or decreases and returns this to the RFO. The RFO then uploads this information into the Public Budget Formulation (PBF) system. The UKRF income estimate is usually plugged at the current year amount until mid-March. This gives the Associate Vice President (AVP) enough data during the current year to give a more accurate income estimate for Grant F & A. In March, the correct estimate is keyed in PBF by the RFO.
- Non-General Fund Income Estimates: Non-General Fund cost centers are the Gifts and Endowments. The University Budget Office (UBO) sends RAFA a Non-General Fund Income Estimate worksheet that identifies the anticipated income distribution for the next fiscal year. The RFO will work with the department to determine if the earnings will be distributed to the spending account or reinvested in the endowment and key the entries in PBF.
- Salary Proposal: The Salary Proposal occurs in several steps.
- Salary Freeze: The UBO identifies a "salary freeze" date. On this date, a snapshot of all salaries is taken and this is the salary information that will be used to determine merit increase pools. Any salary adjustments that are effective after the salary freeze date will not be will not be considered when calculating merit increase amounts. The salary freeze date is also the date on which an employee must be hired into a regular position in order to be eligible for a merit increase. Prior to the salary freeze, departments must ensure that all salaries are correct, that all positions have a correct 1018 cost distribution entered in SAP, and that all regular staff positions contain only one employee.
- Salary Summary: The Salary Summary worksheet is completed using information from the frozen salary information. This worksheet identifies the total amount of all salaries in the Research area by funding category code and by employee group. Salary changes that are effective prior to the salary freeze date but were not keyed prior to the freeze can be entered on the worksheet as an exception. The Salary Summary worksheet is submitted to the UBO. The UBO then compares our submission to their report and confirms that our totals match theirs.
- Salary Guidelines & Merit Increases Awarded: Once UK Administration determines merit increase percentages, Human Resources and UBO will distribute salary guidelines dictating how the merit increase pools should be distributed. RAFA will send each Research unit a Merit Increase Worksheet. The units will distribute merit increases to their employees based on the salary guidelines and ensure that the unit does not award more than the merit increase pool amount. Merit Increase Worksheets are returned to RAFA, who then keys the new salaries in PBF.
- Salary Proposal Reports: After keying all merit increases in PBF, RAFA will run Salary Proposal Reports in Business Object (BOBJ) to look for irregular entries. Justifications for employees listed are added & the spreadsheets are submitted to the UBO. The reports determine:
- Zero Salary Increase - Identifies employees that did not receive a merit increase
- Salary > Max - Identifies employees who received a merit increase that takes them over the maximum for his/her salary scale
- Negative Increase - Identifies employees who received a negative amount for merit increase
- Over Twice the Average - Identifies employees who received a merit increase that is more than twice the merit pool percentage
- Under Minimum - Identifies employees who, after receiving a merit increase, are below the minimum for his/her salary scale
- Fund Balance Projection Worksheet: RAFA sends a spreadsheet of all general fund cost centers to each Research unit. It includes the annual budget and year-to-date expenditures. Units are asked to enter the amount of expenses they anticipate to incur between the date of the spreadsheet and the end of the current fiscal year. The difference will be the fund balance projection. If the unit anticipates a fund balance, they are asked to identify how they anticipate spending the fund balance in the next fiscal year, should it be returned to them. The completed spreadsheets are returned to RAFA and compiled into a single document to be submitted to teh UBO as part of the Budget Transmittal Letter.
- Service Centers: Service Centers fall under cost principles and standards set forth by the U.S. Government. The Service Center Budget Officer will meet with Service Center Directors to discuss next year's anticpated needs or expenditures, possible personnel changes, new service that may be offered or scaling back unproductive offerings. This is a time of informal assessment between the Directors and the Service Center Budget Officer, representing the Vice President's office. Once merit increases are determined, the rate sheets can fbe finalized. The Service Center Budget Office will then key the entries in PBF. Rate sheets, Budget Reconciliation Sheet(s), and estimated fund balances are submitted to SPA. SPA will return the approved rate sheets to RAFA & this usually occurs after July 1st.
- Unit Base Sheet: Units are provided with the current fiscal year's revised base. The revised base is the original base plus or minus any recurring transfers that may have occurred throughout the fiscal year. The revised base is the starting point for the next fiscal year budget process. Once the information is confirmed, RAFA will add salary, benefits, and other increases/decreases to determine each unit’s revised base. The revised base is the amount to which each unit should balance.
- Budget Narrative: The budget narratives are the short descriptions of each unit that is included in the annual budget produced by the UBO. Budget Narratives are required to include a description of the unit and its function, general statements about the unit's overall mission, and an emphasis on the unit's plans for the upcoming fiscal year and how those plans relate to the University's strategic plan. The UBO sends the previous year’s narratives to RAFA for changes. The narratives are broken out by the unit and sent to the respective units for changes to be entered. It is required that the track changes feature in Microsoft Word be used when revising the budget narratives. Units return the updated narratives to RAFA. The narratives are compiled into one document and forwarded to the VPR’s for final review and edits. Once the VPR has approved all the narratives, the completed document (with track changes still turned on) is submitted to the UBO.
- Narrative Detail Report: There are two Narrative Detail Reports for Research. These are included in separate locations in the University Budget Book. The Financial Data Report includes the Research financial information by how much is spent on Personnel Services, Operating Expenses, and Capital Outlay by budget type. The Expenditure Detail Worksheet lists the total budgeted expenditures by unit by budget type. At the start of the budget process, the UBO sends to RAFA the worksheets prepared for the previous year’s budget book. The UBO will have updated the worksheets moving the current fiscal year to the left side of the worksheet and adding the next fiscal year headings. Run the narrative detail BPS reports for the current fiscal year to reflect the revisions to the current fiscal year budget. This is submitted to the UBO. At the end of the budget process, once the Research Budget has been entered into PBF and balanced to the new base provided by the UBO, the narrative detail BOBJ reports are run again for the next fiscal year and the right side of the worksheets is updated. This is one of the last steps in the budget process.
- Financial Data Report
- Run the narrative detail report keeping the hierarchy on for 4 levels on the Commitment item. You can remove the fund center.
- For the Research Administration part, refer to the annotated expenditure detail report from the previous year. Judy has a BW View that you can run initially. May have to include new cost centers created during the year.
- For GF enter business area 0101 to 0199, exclude all the 10128xxxxxx cost centers and exclude Haggin Fund 0021700300, department 4*
- For restricted, run the report on fund centers 1215*
- For recharge, run the report on fund centers 104*
- Expenditure Detail Report
- Run the narrative detail report, turning the hierarchy off and removing fund centers for all units except Research Administration (refer to the annotated copy for the cost centers).
- Financial Data Report
- Budget Transmittal Letter: This letter is from the Vice President for Research adn assembled by the Associate Vice President for Research. It should include the following attachments:
- A discussion of the impact of any budget cuts and/or budget increases Research may have received
- Fund balance projections
- A discussion of how fund balances will be spent the following year