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Part 5. Financial Services

Section II. Business Office

B. Budget

1. General

The University currently maintains approximately 1,100 accounts. These accounts are supported from many different sources which are identified by the last two digits of the account number. The following list identifies the various fund groups:

01-09 General Education Appropriated Funds
10-19 Vocational Education Appropriated Funds
20-29 Local Funds
30-39 Revolving Funds
40-49 Federal Funds
50-59 Other Restricted Funds
60-69 Loan Funds
80-89 Plant Funds
90-99 Agency Funds

An annual operating budget is prepared for appropriated and non-appropriated funds. However, the following discussion relates only to those departmental accounts funded by appropriated funds.

2. Budget Request

The University maintains five programs that receive appropriated funds from the legislature; General Education Program, Vocational Education Program, Idaho Dental Education Program (IDEP), Idaho Museum of Natural History (IMNH), and Family Practice Residency. A budget request for each of these programs is approved by the State Board of Education in the fall for the fiscal year beginning the following July, and submitted to the Governor and Legislature for their consideration. For General Education, the Legislature appropriates funds for the four institutions of higher education to the State Board of Education, which in turn allocates the funds to the three universities and one college. Funds for Vocational Educational Education are appropriated to the State Board for Vocational Education, which then allocates funds to the area schools. IDEP, IMNH, and Family Practice Residency are separate programs which receive specific legislative appropriation.

Once the University receives the funds for these programs, the annual operating budgets are developed which reflect the University’s plan for the upcoming year. The operating budgets cover a fiscal year, beginning July 1 through the following June 30.

The University also receives state support from the Permanent Building Fund. Funds are available for specific projects relating to preventive maintenance and/or capital projects. These projects are requested independently of the General Education request, as approved by the Board and the Permanent Building Fund Council. Funded projects are administered through the Division of Public Works and are not reflected in the ISU accounting system.

3. Operating Budget Control

a. Budget Categories

Budgets are controlled within the following categories; regular salaries, irregular salaries, fringe benefits, travel, communications, material and supplies, and capital outlay. Personnel costs paid from regular time reports are charged to the regular salary category whereas personnel costs reported on “time card” are paid from the irregular salary category. Communications include postage and telephone costs. Materials and supplies are self-explanatory. Capital outlay items are those over $300 in value with a useful life of two (2) or more years.

b. Budget Control Responsibility

One of the primary purposes of budget control is to ensure that expenditures do not exceed allocations. The administrator of each unit has the primary responsibility for the management of the unit’s budgets and the planning of expenditures to maintain a balance sufficient to meet requirements throughout the year. Failure to maintain an adequate balance within a category will result in requisitions being rejected.

c. Reports

Accounting generates and provides each account director with monthly statements of the account activity. These statements have three sections; Outstanding P.O.’s, Accounting Activity and YTD Account Summary. They provide administrators a financial record of all charges made to their accounts, funds encumbered for future obligations, their current budget, and unencumbered balance. Administrators should carefully compare these statements with their records. Any discrepancies should be reported immediately to Accounting. This review is critically important toward the end of the fiscal year to ensure that sufficient funds are available to process requisitions.

d. Budget Transfers (Non-Academic Accounts)

With the exception of regular salaries and fringe benefits, funds may be transferred between categories within the same account or between accounts to correct a budget overdraft or a potential overdraft. Budget transfers cannot be made from appropriated accounts to non-appropriated accounts or vice versa. Departments should submit their requests for budget transfers to their Dean or appropriate administrator for approval and then forwarded to the Budget Office for processing.

Currently there is no standard form for requesting budget transfers, however, requests should include the amount, budget category (from and to) and the account number (from and to). All transfers will be considered temporary adjustments (affecting the current fiscal year only) unless a permanent transfer (affecting the budget base) is specifically requested.

4. Salary Savings/Non-academic Accounts

The University budget provides funding for all authorized positions for the fiscal year as approved by the Board. Any savings realized as a result of unfilled vacant positions, resignations, or any other type of personnel turnover, are transferred from the departments to an institutional reserve account unless prior approval is obtained to retain the funds within the department. Departmental use of salary savings may be the temporary appointment of a person or persons to fill a vacant position until a permanent replacement can be hired. Requests to retain salary savings require approval of the appropriate vice president or the President.

Salary savings accumulated at the University level are used to fund specific needs that arise during the year. Requests to use University salary savings should be directed to your appropriate vice president or the President.

5. Academic Budgeting Procedures

The responsibility for budgeting within a major academic unit, college, rests with the dean. The dean will have the responsibility to allocate (reallocate) new and existing resources between budget units and budget categories, unless otherwise instructed by the president and/or the academic vice president. The college has carryover authority from budget year to budget year; however, carryover funds are restricted to one-time expenditures. Once a fiscal year budget has been established, colleges are expected to fulfill all program commitments as well as provide for routine contingencies. The University will make reductions only in cases of significant revenue shortfalls or major campus emergencies.

Each budget year is a discrete event; however, the prior year base, appropriations for specific purposes and programs, and monies allocated for salaries and fringe benefit charges will form the basis for budget development. Any additional funds will be allocated in an effort to respond to enrollment changes (enrollment workload adjustment). Additionally, inflation, defined accreditation requirements, and the implementation of approved new programs will be given careful consideration.

Colleges will be responsible for all expenses incurred by the unit unless such expenses are budgeted as part of a central University budget. Over time, efforts will be made to fund as many activities as possible at the college level.

These budget guidelines are designed to give flexibility and authority to the deans in allocating financial resources. With this authority goes the corresponding responsibility to effectively manage these funds and to maximize the effectiveness of University educational activities.

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