Budget Symposium

September 12, 2016

Rhododendron Room

Recon@ Review (Kristy Kiser)

Kristy went through a presentation using Recon@ to refresh the group on how to use the system and where to find reports.

Once you log in, you are on the welcome tab at the top of the page. On this page the reconciliations are broken down by period (month) and it shows the number of reconciliations not prepared, not examined, not approved, and any issues. It also shows the percentage complete and the percentage complete on time. These need to show 100% as of the 15th of every month. It is required that these reconciliations be reconciled and approved by the 15th of every month. Performance on this is something the college is graded on by the state and it could affect funding.

To get to your reconciliations to prepare or approve from the Welcome tab, you will need to click on the number listed in the columns (Not Prepared or Not Approved) in the month you need to complete. This will take you to the Summary tab for the reports in that month. If you scroll over to the right you will see a row of icons. Those icons are:

  • Folder–Click this icon to get to the detail report to reconcile and see individual transaction for that month
  • Pencil – Leave comments here
  • Arrows – As the preparer you will receive a green arrow to send the report to the approver once all of the transaction have been checked; As the approver you will see a red arrow to send the report back to the preparer if additional actions are needed
  • Person- Labor pay and distribution
  • Printer – Print preview icon for BBA

If a project does not have activity, it will not show on your list to be reconciled. However, if you want to look at a project with no activity you can do a search at the top of the Summary tab. You can search by project number, award, org, approver, or preparer. If you search by approver or preparer, it will show a list of projects for that person.

Once you have entered a project to reconcile (by clicking the folder icon), you will first see a snapshot of the budget by category on the By Budget Category tab. It is important to pay attention to the Progress column here over to the right. This percentage needs to be 100% by the 15th of every month.

To see your transactions listed individually for that month you will need to click on the Expenditure Detail by Task tab. Here is where you will click the boxes to acknowledge you have reconciled and have backup documentation for that transaction. You can also sort this information by the column headers at the top, for example, Expenditure Type. Please also note the Actions column all the way to the right. Here you can leave comments by clicking on the pencil or flag transactions by clicking on the flag icon.

To see and check off any planned expenditures you will need to go back to the By Budget Category tab. Here you will click the sideways triangle beside the Budget Category column in the blue. Once clicked, this will generate a list of planned expenditures. You do not have to check these off individually like the actual expense. Instead you will check the box at the top of each expenditure type in the blue.

The quickest way to view a BBA report is by clicking the printer icon all the way to the right on the Summary tab at the main top. There is also a Reports tab at the main top that can be used. Here you will find a list of different reports:

  • Oversight Report – allows you to see the status of projects; this is good for approvers and you can search by approver ID
  • Historical BBA – this allows you to view BBAs from previous months by using the search criteria at the top; you can use this to compare years
  • Alternate Approvers Report – it is recommended that if you are going to be out of the office for vacation or sick leave that you set someone as an alternate while you are gone; this report will tell you when the system will switch back to the original preparer or approver
  • Delinquent Users Report – here you can see all the projects in your area that were late; you will see a negative number until the due date of the 15th has past if you are viewing the previous month that is due

Please remember that these have to be completed by both the preparer and approver by the 15th of every month. Approvers can approve reports from any web browser and do not have to be on campus.

Questions:

Jennifer Partin – I had pushed my report forward with the green arrow and it bounced back to me, what happened?

It could be a system glitch at times, but it also be that the approver may have accidentally clicked the red arrow back to you by mistake.

Dashboard Presentation (Sim Ewing)

The dashboard spreadsheet is a result of a request for increased knowledge of what is going on with the college’s budget. Once this is presented to a few more groups, this will be put online to view on the budget office’s webpage.

The Dashboard is categorized into three sections:

  1. E&G (state funds)
  2. Auxiliary (example are Bookstore, Student Housing, Cafeteria)
  3. Combined numbers and Full Time Wise Campus Enrollment

The magical number when looking at the budget is 1300 full time students annually. This is the number used when building the budget and estimating the revenue to be generated from tuition and student fees. Historical evidence shows the loss rate of students to be 9% from spring to fall of each year. I have included on this Dashboard the full time enrollment number monthly as of the first day of each month.

What you are seeing are real numbers through August. Please keep in mind that in July of each year we have several one-time expenditures like insurance and dues that are included in these expenditure numbers. These one-time payments affect cash flow given their timing. It is important to remember that the state does not give us our funds in one lump sum at the beginning of the fiscal year. Instead, we receive these funds in monthly payments throughout the year. The rest of our funds are generated from tuition and student fees. In the beginning of the fiscal year we do not generate much money. In addition to these one-time expenditures in July, the University has also began charging us interest on any cash projects in a cash deficit. It is through reserves that we have been able to cover overages in the past and any interest charges, but after the last few years we have burnt through a significant amount of reserves and no longer have this cushion. This is why it is very important that you reconcile your project through Recon@ in a timely manner because we need the state money to help us.

If you go back to fiscal year 2010 (July 1, 2009 to June 30, 2010), this is when we were receiving a greater amount state funds before budget cuts began. We are still below this amount and have the potential for a state budget reduction this year. The state pay raises were contingent on the state hitting their revenue targets for fiscal year 2016. This did not happen so the state decided to defer the pay raises at this time. Currently the state is about 5% off of their revenue targets. Other state agencies have been asked to submit a plan for a 5% budget reduction. At this time higher education has not been asked to do so. However, the Department of Planning and Budget has said to expect a request but they are not sure when or what it will be.

Currently 83% of the state budget is people. If you look at that plus the utilities costs and the one-time mandatory expenses in July, this does not leave much flexibility. This is why it is so important that you stay within budget and your purchases be necessities.

Looking at the E&G portion of the Dashboard, we have entered the revenues collected in July and August and the expenditures for each month as well. Overall we have collected $4,196,012 in revenues to date through August. We have spent $5,687,563. So as of the end of August we have cash deficit in the amount of $1,491,552.

Something to also keep in mind is that the auxiliary side of the house is required to pay a fee to the E&G side each year for overhead. This works similar to how a grant will have F&A. The indirect cost charge for the auxiliary side feeds the E&G budget, so the if the auxiliaries revenues go down then this directly affects the E&G side as well.

People will say they still have budget. This may be true but if the cash is not there to support the budget it doesn’t matter. I use the checkbook analogy I told my girls when they got their first bank accounts. Just because you have a book of checks does not mean you can go out and write them, if there is not cash in the account to cover the check it is no good.

Looking at the auxiliary portion of the Dashboard, a total of $605,081 in revenues have been collected through August. Expenditures through August total $2,001,468. This leaves a net deficit of $1,396,387. This is historically what we see for this time of year because there is not a lot of revenue being generated. We should see a change in September. Summer conferences generates auxiliary revenue in the summer. This is why we want people buying books on campus, buying meal plans, and staying in student housing.

Looking at the combined numbers we are in a deficit of $2,887,939.

The Dashboard also includes enrollment numbers that drive a portion of the E&G budget. Enrollment numbers are reported as of the first day of each month. It also provides the numbers for the first day of that month last year to compare. On September 1st we had a total count of 1322 in full time students. As of Friday this number has dropped to 1301. Please remember our budget is built on 1300 annual full time students. There is a high potential that we will not generate that cash.

We are going to be putting this up so that everyone can keep track of where we are. We have a couple more presentations first before we can upload it. But we will also do updates at these quarterly meetings.

At this point I am asking for enrollment numbers twice a week. This is as low as we have been. We had a large graduating class last year and have had some small classes coming in for years past. But this year we have a large freshman/transfer class.

Questions:

Carolea Newsome- How are we covering the current $2 million deficit?

We are currently coving the deficit with reserves and cash flow. But we will need to replenish the reserves by the end of the year to cover any other expenses.

Jennifer Partin- Do you only count full time students?

Yes, because they pay tuition and student fees that make up for everything budgeted.

Scott Bevins- How much financial aid has been collected to this point?

Not much

Holly Meade- What does that mean haven’t collected financial aid?

This means it has not been processed on the student’s account.

Carolea Newsome- How do these numbers compare to previous years deficits?

These are pretty normal number for this time of year because we are not generating revenue. That will change and close the gap, but we still have to make enrollment.

Dana Kilgore- What is the date for the payment on tuition?

August 23rd, however a lot of our students are on financial aid. We have had some set up payment plans.

Patricia Bentley- What happens when we drop below the magic number?

This means the revenue will not be there to support the budget.

Tom Costa- Does the state appropriation give some cushion if we fall below 1300 students? Where does the state appropriation fit in?

Just looking at the E&G side, 80% of the budget is people so our wiggle room is very limited. The state funding is subject to the revenue collections of the state and they are short. The Federal government has mentioned sequestration and if this happens it will affect the state of Virginia a lot. This is the reason we do not fully trust we will receive the full $15 million budgeted. The state is still discussing how to treat higher education because there is no statutory requirement to fund higher education. The farther we get into the fiscal year before we receive reductions the greater impact because more funds will be spent and encumbered.

Tom Costa- Could there be an incentive for not spending your full budget? Then money could be shifted to another area that needs it.

We would like to think so but here is an example. The library opened this fiscal year and is the second largest building on campus. The operating funds were included in the Governor’s budget and we had calculated that in our budget as well. However, the General Assembly took all operating funds out of the state budget. This is only the second time this has happened since 1994. This left an $800,000 whole in the budget. If we don’t get surprised with things like this, there would be potential to do things. We had to fund the revenue to cover this expense. In addition, we have to cover an extra 27th pay period this year. Our bi-weekly employees are paid with 26 pay period throughout the year. But every four years there will be a year with 27 pay period. The additional cost between this and the operating for the library is $1.1 million.

Another thing to keep in mind for this year is the FLSA which will change rates of pay and overtime. We were not aware of this until the start of the fiscal year. This is to take affect this December.

Julie Scott- With the library open, will utilities continue to go up?

We anticipate utilities of $150,000, so we salvaged that from other budget to cover it for the library.

Don Sharitt- Will there be monthly notes on the Dashboard?

Yes, there will be notes at the bottom each month. We will make it available online after it is presented at a couple more meetings.

Kathy Still- Will reporters be able to see this?

It will be on the college’s website.

Dana Kilgore- Could there be a link to the budget on the faculty page?

We can probably do that.