Annual Operating Budget Policy
The Board of Trustees of the University require that senior management [1] submit the proposed operating budget for the coming academic year for approval at the Trustees’ annual meeting in June, and [2] report updates on the actual operating results against budget at regularly scheduled meetings during the year.
The Consolidated Operating Budget (COB) is presented to the Trustees for their approval. Per a schedule, determined by the Office of Management and Budget, every vice-president, dean and department chair with responsibility over one or more Departments is required to submit both an Original Budget and a Current Estimate (regular updates during the year).
Reasons for the Policy
Prudent fiscal management of any complex business entity requires the use of budgets to efficiently allocate resources and manage ongoing operations.
Primary Guidance to Which This Policy Responds
The policy provides one element of the information Trustees utilize in their deliberations and provides tangible proof of sound management practices to the University's outside auditors.
Responsible University Office & Officer
The Vice-President for University Budget and Financial Planning is charged with responsibility for the development work on this policy and the accompanying procedure, as well as maintenance and inquiries that may arise regarding the policy. Under the direction of the Vice-President for University Budget and Financial Planning, the Office of Management and Budget develops and administers this policy and procedure and is accountable for the accuracy of its subject matter, issuance, and timely updating.
Who Is Governed By This Policy
Every vice-president, dean and department chair with responsibility over one or more department.
Who Should Know This Policy
Every vice-president, dean and department chair with responsibility over one or more Departments, departmental administrators and finance staff, senior administration officials and the entire staffs of the Office of Management and Budget (OMB) and the Medical Center's Office of Budget and Finance (CUIMC OBF).
Exclusions & Special Situations
None
This policy requires actions in two areas: [1] the submission of the proposed operating budget for the coming fiscal year (Original Budget) and [2] regular updates on the actual operating results during the year (Current Estimate).
Procedure
The Office of Management and Budget provides guidance as to the specific procedures needed to comply with the Policy. The data for both the Operating Budget and the Current Estimate is collected in the Budgeting Tool module of FinSys, the University’s financial web portal. Standardized COB reports are available in the Management Reporting section of the Data Warehouse, also in FinSys.
Timetable
The Office of Management and Budget provides an annual Budget Year Calendar establishing a timeline for compliance with the Policy. Specific details include the type of action or deadline, the applicable sector or budget area, the target due date and the item description.
Approval
The Original Budget as presented in both the Budgeting Tool and ARC is the Operating Budget as approved by the Trustees. Once approved, these values do not change. A manager must use the Current Estimate field to present his/her ever-evolving outlook for the actual results of the current fiscal year.
Responsibilities
The vice-president, dean or department chair is ultimately responsible for the accuracy of the COB, verifying that the COB report represents the expected results of their Department(s), and explaining variances to the satisfaction of OMB, senior management , or the Trustees.
Definitions
Budgeting Tool Module – A module within FinSys used to enter and hold the Consolidated Operating Budget.
Current Estimate – A projection of the expected financial results for the entire fiscal year prepared at some during the fiscal year.
Direct Sources and Uses - Revenues or expenses that flow between the University and an external party.
ARC – ARC is the acronym for Accounting and Reporting at Columbia the financial accounting system that holds legal records of the financial activity of the University.
Final Results – The summary in the COB of all sources and uses for a fiscal year. The final results provide the bulk of the financial information presented in the Statement of Activity in audited financial statements.
FinSys – The University’s web portal for financial accounting and management systems.
Indirect Sources and Uses – Revenues or expenses that flow between different segments of the University financial structure.
Original Budget – A plan for the financial activity of the University for the upcoming fiscal year that is developed by senior management and approved by the Trustees.