Questions and Answers
A budget is an initial financial plan for an activity. It represents the best estimate of the revenue generated and/or the cost associated with a proposed activity for a period of time-typically one year.
A budget estimates the revenue and associated cost of an operation. It is a means of tracking revenues and expenses to assure that resources are being used effectively to meet the goals of the university.
A budget also helps to assure a proposed activity is in compliance with state legislation.
A budget helps to identify an appropriate level of funding for a department or function by providing comparable current and historical information.
One good way to plan a budget is to review the historical spending patterns within a unit. Examine one or two years of financial information and see how much was actually spent on salaries, benefits, and operations. This analysis provides a basis for planning budgets for future years. Next consider what items may be different from past years and make budget adjustments for salary increases, equipment replacement and any other items that may have changed.
When your spending plan changes mid-way through a year, it is necessary to make adjustments to the budget. For example, the need for additional Part Time Overload (PTOL) may require budget to be decreased in the operations category and increased in the salary and benefit categories. If you are managing more than one budget, it is sometimes necessary to move budget from one unit to another. When additional funds are given to you from another unit or you have agreed to transfer funds to another unit, a budget revision is needed.
To move funds within a fund type (Ledger 1XXXXX), you need to complete a budget revision form.
Remember, everything you sign may have budget implications, including travel authorizations, purchase requisitions (P/R's), open order purchases, inter-department purchase orders (IDPO's), payroll action forms (PAF's), timesheets, etc.
The easiest way to get started is with a spreadsheet - start with your beginning (original) budget allocation. Each time you spend or commit funds, check your remaining (unspent) balance on your spreadsheet. If sufficient funds are available, proceed with the transaction and make a note of the dollar amount spent on your spreadsheet. Some budget managers prefer to use desk-top checkbook software instead of a spreadsheet to monitor and reconcile the account.
Some managers find it more useful to track in further detail by outlining and planning budgets for copying expense, professional development for each person in the department, events and speakers, computer replacement, etc. A budget is as unique as the department and the individual managing the funds. If you need assistance setting up and tracking your budget, feel free to contact us.
View a sample spreadsheet for tracking and managing a budget.
It is important to reconcile your budgets each month just as it is important to reconcile your personal checking account. The reconciliation process is fairly simple if you record each commitment to spend funds. Recording expenditures and commitments as they are made is similar to recording each check in your personal checkbook register.
As the individual responsible for your budget, you will need to access online financial information and reports in Banner. Compare the Banner financial information and reports to the expenditures listed on your spreadsheet and mark all expenditures that have been paid. If there are unexpected expenses that you can identify as something merely overlooked, add them to your spreadsheet. If you can't identify a charge, make sure to investigate to assure that you have not been charged incorrectly.
Reports are available each month in Banner to use for your reconciliation.
|Reconciling Your Budget||Balancing Your Personal Checkbook|
|Track expenditures and commitments as they are made in a spreadsheet or other checking software||Record checks as they are written in a checkbook register|
|Monthly Banner financial report||Monthly bank statement|
|Mark expenditures that have been paid on financial report||Mark checks that have cleared the bank|
|Add cleared expenditures to spreadsheet as needed||Record banks charges, fees, interest earned as needed|
|Question unexpected charges-- these could be incorrectly charged to your account||Question charges for unknown items-- bank could have made an error|
|Beginning (original) budget less cleared expenditures should equal budget balance available on monthly Banner financial report||Beginning balance less cleared checks plus deposits made should equal Bank statement|
|Help! Contact the budget office...||Help! Call your bank...|
The Chart of Accounts is a set of fields that contain certain values. These values are organized into tables, and it is the structure and relationships of these tables that form the foundation of the Chart of Accounts. This structure determines how data is collected and recorded in the various Banner modules and how that data is retrieved for financial transactions and financial reporting.
The chart of accounts structure in Banner is composed of four elements: (FOAP String) Fund (funding source, i.e. State, Self-Support, etc.); Organization (unit), Account (type of expense, revenue, or general ledger i.e. 62100 is the account for faculty salaries); and Program (the classification of the expenditure i.e. program 10011 is Instruction). Together, the chart elements classify how revenues, expenses, assets, liabilities, and equity are recorded.
The Index Code is a six (6) digit code that is a shortcut code of the chart elements for Fund, Organization and Program components of the "FOAP" element string. Using indexes reduces data entry errors.
"Permanent base" or "base" funding describes a funding source that is on-going. An example of permanent base funding is a permanently allocated portion of state funds. Another example of permanent base funding is an on-going steady stream of revenue in a self-support organization.
Salary and benefits for permanent employees need to be funded using an on-going (permanent) source of funds. The budget office tracks the state permanent base funding and sends updated Comprehensive Budget Level (CBL) reports to each major budget unit. When a request is made to hire a permanent employee, the budget office checks the CBL to make sure an appropriate amount of permanent base funding is available prior to the actual hire.
One-time funding describes a funding source that exists for a limited time. An example of one-time funding is the temporary salary savings a department might have if an employee is on temporary leave without pay. The salary savings funding is available for now, but will be needed in the future when the employee returns to pay status. Another example of one-time funding is spending a portion of unrestricted net assets.
One-time funding can be used only for one-time expenditures such as goods & services purchases, travel or equipment. One-time funding may be used for temporary employees, but not for permanent employees.
It is important when planning a budget for employees to consider the cost of employer benefits. Benefit rates can range from 1.4% of salary to more than 35% of salary. Part-time employees are not generally eligible for the full benefits of permanent employees who are more than 50% time. To calculate estimated benefit costs for permanent employees use the following EMPLOYER benefit rates current as of July 2015.
|$888 per month||Rate times 12 months for all employees who are eligible to receive health insurance.|
|Select one retirement plan as appropriate for position|
Under age 35
|5.0% + 0.5%|
7.5% + 0.5%
10% + 0.5%
|Rate times salary earned
Supplemental Administrative Fee for TIAA-CREF Retirement rates = 0.50% of salary.
|PERS I, II, & III||11.18%||Rate times salary earned|
|WTRS||13.13%||Rate times salary earned|
|LEOFF||8.59%||Rate times salary earned|
|FICA TAX||6.2% up to $117,000 max salary||Rate times salary earned up to maximum salary(on calendar year basis)|
|Medicare||1.45%||Rate time salary earned|
|Medical Aid||$0.29 times hours worked (Salaried employees are up to $23.16 per pay period)||Based on 160 hours per month (max) for full time employees. Pro-rated for part-time employees. Based on actual hours for hourly employees.|
|Unemployment||0.1%||Rate times salary earned|
|Disability||0.43%|| Rate times salary earned
Tenure track faculty and executives
For further information on employer benefit costs, contact the Payroll Office at 359-2325
Budget Encumbrance Management (BEM) allows the Budget Office to post salary and benefit encumbrances on the Banner Finance system. By doing this, BEM provides up-to-date information on Banner for salary and benefit budgets and commitments. This process allows a university budget manager to look at a single form on (FGIBAVL) in Banner Finance for a specific index and quickly determine if there are unencumbered salary and benefit funds available to them.
Budget and encumbrance adjustments are made in Banner Finance to salaries and benefits on a semi-monthly basis. Any budget changes are offset to the unit reserve index for state funds, and to direct expense in the same index for non-state funds (excluding grants).
BEM also allows us to manage encumbrances of non-hourly pooled positions including quarterly faculty and graduate service appointment pools. For pooled positions, encumbrances are based on Payroll Action Forms (PAFs) submitted and liquidated based on actual payroll activity.
The budget office provides this service semi-monthly and sends out semi-monthly reports to each unit head which outlines the detail behind the BEM process. If you have questions about a particular transaction and/or the BEM process, please contact the Budget Office.
The first year of the biennial budget process entails a time-intensive, detailed review of university priorities and budget needs at all levels. The second year of this budget process continues alignment of general budget allocations with university goals and priorities. As new enrollment funds become available, incremental funding decisions will be evaluated based on contribution to the university's mission.
The biennial budgeting process at EWU is designed to give the University the ability to meet changing institutional needs, while supporting its historical mission. The budget is strongly linked to the University's Strategic Plan.
Year 1 Biennial Budget Process
The underlying premise of the budget process is that each major budget unit is funded based on its need for human resources (faculty, classified staff, etc.). The goals of need-based budgeting are to:
- fund based on need and priority
- moderate the university's large fixed cost structure
- establish normal planning and control processes
- improve the university's responsiveness to its environment
Academic units will be asked to develop operating plans based on the number of courses being offered. This analysis will help to determine the number of faculty needed to teach the planned courses.
Non-academic units will be asked to answer the following four questions as each departmental budget is reviewed:
- What is the purpose of this unit?
- How is this purpose accomplished?
- What human resources are required to accomplish these tasks?
- What other resources are required to accomplish these tasks?
Each vice president will work within their organizational units to analyze funding requests, examine emerging budget issues and prepare a budget that reflects the priorities of the division and the institution. The vice presidents will meet with the president to make final funding decisions through a prioritization process, which will result in a balanced budget.
Year 2 Biennial Budget Process
The vice presidents will meet to re-evaluate the University's priorities as they relate to its enrollment goal and its mission. Priorities identified but unfunded at the end of year one of the budget process will be reviewed, and additional funding issues important to Eastern's future enrollment growth will be identified.
Based on the second year revenue estimate from the budget office, a modified list of funding priorities will be identified and funded up to the level of the estimated revenue projection for the second year.
The leadership will discuss and identify funding priorities at various enrollment levels beyond the revenue projection for the second year of this budget process.
The university internal budget process will continue to follow this biennial cycle of in-depth review in the first year of the biennium and incremental funding based on priorities in the second year. In addition, comparative data will be developed to help Eastern better align its budget allocations with university funding allocation standards and nationally developed benchmarks.
Every other year (Even numbered years) the Budget office submits to the Office of Financial Management (OFM) Eastern's biennial budget request for the future biennium. This request is a document completed under specific directions from Olympia outlining the funding requested for Eastern in the future biennium. The document includes:
- Eastern's Strategic Plan
- Eastern's Budget summary - including detail on salary and benefit costs
- Budget summaries by Program
- Special Reports including:
Decision packages are specific prioritized package requests for funding from the legislature. These are not necessarily funded, but are requests for additional funding. View the 2015-17 Operating Budget Request.
Capital funds are the monies appropriated by the Legislature to spend on building projects. Capital projects are divided into major projects (Haregreves Hall, Patterson Hall), and minor projects (room remodels, sidewalk repair, general campus improvements). Capital funds cannot be spent on the day to day operations of Eastern. View the 2015-17 Capital Budget Request Part 1 and Part 2.
There are four types of capital funds, 057, 061, 253 and 357.
- 057 - Funds from proceeds of State of Washington Bonds
- 061 - Funds from timber trusts given to each of the universities. Eastern has its own timber trust fund managed by the BLM. Fund 061 also includes Eastern's share of interest income from the State of Washington permanent fund.
- 253 - Funds from the Education Construction Account consist of transfers from the emergency reserve account required by Initiative Measure No. 601. These funds are to be used for common school or higher education construction.
- 357 - Funds from Gardner Evans bonds as authorized by the legislature in 2003 for critical capital needs of the state's institutions of higher education.
Major capital projects
A major capital project is a project which costs in excess of $5,000,000 or is designated by OFM.
There are three phases to every major capital project: pre-design, design, and construction. Each phase normally takes two years to complete. If a project is appropriated pre-design funds for the current biennium, Eastern proceeds with pre-design activities including preliminary planning for architecture and design. Once pre-design is complete, Eastern requests design funding from the legislature for the following biennium. If design funds are granted, Eastern proceeds with the formal final design of the major project. Eastern then requests permission and funding to move forward into the construction phase the following biennium. If the construction phase is approved, Eastern would then construct the project.
|Patterson Hall Phase II||38,630,000|
|Upgrade and Repair Campus Water System||7,511,000|
|Preventative Maintenance and Building System Repairs||2,217,000|
|Minor Works Preservation: Health and Safety||7,000,000|
|Minor Works Preservation: Infrastructure||7,000,000|
|Minor Works Preservation: Facility||7,000,000|
|University Science Center; Science I||4,500,000|
|Minor Works Program||14,700,000|
An index with a deficit budget balance available (Banner from FGIBDST or FGIBAVL) can be cleared in one of two different ways:
- Increase Budget - Complete and submit a budget revision form to the Budget Office to increase the budget in the index that is deficit and decrease another index within your responsibility. Budget revisions cannot cross ledgers (budget can only be moved within a fund and not across funds). Be sure to consider anticipated spending for the remaining months of the fiscal year and transfer an amount sufficient for the balance of the year.
- Decrease Expenditures - This option should be used only if there are expenditures in an index that belong in a different index. It is important that all expenditures are collected in an individual index for a specific department or function.
A deficit in Unrestricted Net Assets (fund balance) in (Banner form FGITBSR or FGITBAL) can be cleared in one of two different ways:
- Increase Unrestricted Net Assests - Send a memo or email to General Accounting Office to transfer unrestricted net assets to the fund that is deficit and decrease another unrestricted net asset within your responsibility. Be sure to consider anticipated spending and revenue patterns for the remaining months of the fiscal year and transfer an amount sufficient for the balance of the year.
- Decrease Expenditures - This option should only be used if there are expenditures in an index that belong in a different index. It is important that all expenditures are collected in an individual index for a specific department or function.
Follow this link for the Position Numbers to read a brief description and to see what they look like.