Budget Journal vs. Journal Entry

http://www.uh.edu/af/survival/Finance/miscbudgetjourn.htm

Budget Issue Resolution Requests

Budget Issues (or Fund Equity/Current Balance issues) can come up in a variety of ways, through various financial transactions, payroll transactions, and reconciling.  When a budget issue is discovered, the staff or faculty may email budgets@math.uh.edu or visit 645 PGH (inside the main 651 PGH office), so that a review of the cost center can be made by the Budgets & Grants group, and appropriate measures can be either taken or suggested for an amiable outcome.  When requesting a resolution to a budget issue, users should provide the following information to the B&G group.

• For budget check errors on non-sponsored projects: the cost center, amount needed to be paid, and the account code paying the amount. If you have multiple voucher lines, list only those with a budget check error. If you already ran a 1074 to review it for the issue, please attach it.
• For budget check errors on sponsored projects:  first confirm that the budget is flexible enough to allow the expense.  If this is not confirmed by the notes in FMP, then email budgets@math.uh.edu to make a request to fix the budget error.
• For PRF issues (when the ePRF will not allow you to enter a cost center): The cost center, the total amount needed in salary for the assignment, the fringe % needed, and the position title.
• Negative budget node or total budget: First review the notes in the Usage and Account Comments. It is possible that the negative is OK. If not, send the speedtype and the budget categories (or the total negative budget) you are concerned about (specifying budget balance), and specify whether the negative is in PS, in FMP, or in both.
• Negative equity (real money balance, or Current Balance for non-grants): First review the notes in the Usage and Account Comments. It is possible that the negative is OK (fees collect periodically over the entire fiscal year, but the encumbrances are generally entered for the entire 9-12 months). If not, send the speedtype and the negative total (specifying equity or current balance), and specify whether the negative is in PS, in FMP, or in both.

Budget References

Avoid Sign Confusion on budget journals and equity journals (journal entries)

BDM FMP Entry Guide

Budget Node/Account Code Crossreference

Salary and Wage Budget Node/Account Code Crossreference (broken link)

Added FY 2010:  Budget Node/Account Code Crossreference:  Travel and Business / Scholarships and Fellowships

Added May 2009:  Account Code/Fund Code Crossreference:  What T&BE expense codes are unallowable on certain funds.  Also, see Travel and Entertainment policy, added before MAPP was fully modified.

Handling Budget Journals when the Travel and Business Expense Node is Involved

What items are in what budget node in FMP?   In FMP, the account code/budget node crossreference is slightly combined to make coding easier and to make the view for the faculty easier.  In order to see what budget node a charge is posting against in FMP, lookup the transaction, and from the Transactions List screen, click the button Commitment Detail Report.  It will specify expenditures by commitment, then by "FMP budget node."

See below for sections on equity journals, budget journals, commitments, and fees.

Diagnosing Budget Issues

NOTE:  FMP is FileMaker Pro, PS is PeopleSoft.

A Financial Document has a Budget Check Error

All budget errors:  See (broken link) http://www.uh.edu/af/survival/Finance/bugchecking.htm.    In order to determine the budget node with the issue, find out the expense or salary account code giving the problem from the processor, look in FMP for the budget level used by the cost center in question (Award Entry screen), and use the Budget Node/Account Code Crossreference to determine the budget node with the issue. 

Budget check errors on non-sponsored projects:  the budget node with the issue does not have enough available budget.  Either transfer budget around within the cost center, do a request to budget (if applicable, see below), or release encumbrances to clear the low budget in the budget node.

Budget check errors on sponsored projects: 

There are three possible reasons:

1. The amount you are trying to budget check is throwing the whole cost center negative.
2. The accounting end date has expired.
3. There is no zero budget setup in the budget node affected. 
4. In the case of requisitions only, if there are not enough funds in the budget node, then we must contact the Division of Research for a budget override.

First confirm that the expense is allowable, either directly in the budget or via the flexibility built into the budget (by reviewing the notes in FMP, the NOA or Mod's, and the sponsor agreement and rebudgeting guidelines).  Then confirm that it is not outside of the accounting dates.  If a document is trying to budget check outside of the accounting dates (find these in RD2K), it will return an error.  If this is the case, contact the Research Administrator assigned to NSM to ask them to extend the accounting end date to allow the item to be processed AS LONG AS the final bill is either not yet submitted to the sponsor or the final bill included that particular charge.  Also, check to make sure that the expense does not throw the ENTIRE cost center budget balance to the negative.  When the entire cost center's budget is negative, it may shut off the budget checking ability.  See 1074.1, showing this amount in the Budget Available column, Total Expense row and compare this against the amount that is trying to budget check.  Sponsored projects generally budget check even when there are no funds, because many of the cost centers have flexibility.  But if there is no budget setup in a budget node at all (even zero as a budget), it will fail budget check.  If everything else has been checked, and no other problem exists, then there is a very good chance that the budget node is not setup with what is called a zero budget.  Email the post-award Research Administrator assigned to NSM to request a zero budget setup on the corresponding budget node.  When all else fails, email the Research Administrator assigned to NSM to help with the error.

A Cost Center does not Show up on a PRF

This will only happen if no budget exists for the associated budget on a cost center.  Non-sponsored projects:  Process a budget journal to move funds into the budget node in question.  Sponsored projects:  Email the post-award Research Administrator assigned to NSM to request a zero budget setup on the corresponding budget node. 

A budget node is Negative per FMP or PS on a Non-sponsored Project

PS negative:  confirm with FMP records to ensure that the expenses will remain on the cost center.  Then process a transfer between budget nodes to cover the negative budget node.

A budget node is Negative per FMP or PS on a Sponsored Project

PS negative:  confirm with FMP records to ensure that the expenses will remain on the cost center.  Then confirm that the cost center will allow such a flexibility in the budget.  If it does not, request or process reallocations to clear the expenses over the allowed budget.

The equity balance is negative per FMP (or positive on the 1074.6 in PS) on a Non-Sponsored Project

PS negative:  confirm with FMP records to ensure that the expenses will remain on the cost center.  Check with the DBA and cost center manager to see if additional funds are expected in the cost center.  This may also be indicated in the budget setup in the cost center.  If additional funds will not be added to the cost center, contact the cost center manager to find out where the expenses should be reallocated to.

The Total Budget is Negative (or zero) per FMP or PS and the Equity is "Positive" on a Non-Sponsored Project

Use this section only if the equity on the 1074.6 is positive, or if the "Current Balance" in FMP is negative.  This indicates that there is neither enough budget setup nor enough fund equity to support the expenses in a cost center.  Confirm with FMP records to ensure that the expenses will remain on the cost center. Check with the DBA and cost center manager to see if additional funds are expected in the cost center.  If additional funds will not be added to the cost center, contact the cost center manager to find out where the expenses should be reallocated to.

The Total Budget Available is Negative (or zero) per FMP or PS and the Equity is "Negative" on a Non-Sponsored Project

Use this section only if the equity on the 1074.6 is negative or zero, or if the "Current Balance" in FMP is positive.  This indicates that there is not enough budget setup in a cost center to cover the real funds that are available for in the cost center.  Confirm with FMP records to ensure that the expenses will remain on the cost center. In this case, you may Request to Budget Fund Balance or New Revenue, if central is allowing this option for the fund code.  Talk to the DBA to confirm.  See below instructions under the header "Requests to Budget Forms & Instructions" under the Budget Journals header.

The Total Budget is Negative per FMP and PS on a Sponsored

Confirm with FMP records to ensure that the expenses will remain on the cost center. Then check with the NOA or the PI to see if additional funding is late coming.  If an additional year's funding will not come until after the expenses post which drive the budget negative, reallocate expenses until the new funding year begins.  If the additional year's funding will come at a time when expenses have not yet driven the budget negative, then cutting the encumbrances to keep the cost center positive may be necessary.  Process a PRF or PO encumbrance release to cut the encumbrance funding or move it elsewhere until the new year of funding arrives.

Requesting a budget change from a sponsor (also link this into the Closeout Checklist when complete)

Talk with the Research Administrator assigned to NSM for details on agency-specific requirements on rebudgeting.

FMP current balance (or total budget for grants) is negative and PS is positive

This indicates that internally, we are aware of expenses not yet posted to PS that may drive the cost center negative.  Check all encumbrances and reassess.  If the situation is still negative, talk with the DBA or cost center manager.  Expenses may need to be reallocated off of the cost center.

When PS equity (or total budget for grants) is negative and FMP is positive

This indicates one of two things:  either our internal processors did not update FMP correctly and expenses are posting to a cost center in PS that are not included in FMP, or expenses are incorrectly posting to the cost center.  Request the Reconcile Group do a pre-reconciliation (reconciliation of items to current) and find out where the issue is.

Equity Journals (aka Journal Entries)

Equity refers to the real dollars in a cost center.  When one does a budget journal, unless the request is only to move budget, the budget office does an additional journal entry to move the equity associated from one cost center to another.  This is a behind-the-scenes process. Sometimes, it is necessary for a department to directly move equity only, and this process is described here.

See http://www.uh.edu/af/survival/Finance/pdfs/imaging.pdf for Journal Entry Procedures and Workflow Entry. 

Guidelines for equity journal entries:

• There should be one line per cost center/account code pair. 
• The Description on the header should summarize the intended action of the journal. 
• The Line Description on each line should describe where those funds are coming from or going to.  E.g., it can be Xfer from <Speed>, Xfer to <Speed>, etc.
• For the appropriate signs and account codes, see Common Journal Entry Account Codes.
• Enter the document in FMP using the Moving Budget Between Cost Centers FMP Entry Guide.  The following differences apply for equity journals:  Each journal entry line is entered as a separate quick entry record, although only our department ID's are entered in FMP (H0110, H0111, and H0474).  Document Type:  Equity Journal; Description: will not include the budget node information; PS Account:  the account code used for each line; Amount:  the amount with the same sign as entered on the equity journal.
• For each cost center with a debiting amount, upload a 1074.6 and confirm that there is enough in the Available Fund Equity row, Balance current month column (or 4th column) to cover the debit.  Note that on the 1074.6, negatives are equity in the cost center that can be debited.
• All uploaded documents should be within one document image.

For the Journal Entry line descriptions, specify where the funds are moving to/from.  E.g., on the line that removes funds from 18083 (to move to 40003), the cost center listed will be 18083, but your journal line description will say, "Move equity to 18083."

As backup for an equity journal, use any requests you may have received as well as the 1074.6 of the cost center(s) that funds are being debited from.  The fund equity available to be transferred is listed on the Available Fund Equity row, Balance <current month> column.

Budget Journals

Note that budget journals can be processed on non-sponsored projects only at the department level.  To change a budget on a sponsored project, the sponsoring agency has to approve.

Budget Journals Between Two Budget Nodes or Two Cost Centers

Navigate in PeopleSoft Finance Commitment Control-Maintain Budgets-Budget Journals-Enter Budget Journals. 

Guidelines for budget journal entries:

• There should be one line per cost center/budget node pair. 
• The Description on the header should summarize the intended action of the journal.  In addition, if the budget journal is to move BUDGET ONLY, this must be specified here in all caps, unless the journal affects only one cost center.  If the journal is for a request to budget, briefly specify the use of the funds.
• The Line Ref on each line should be the speedtype of that line.
• The Line Description on each line should describe where those funds are coming from or going to.  E.g., it can be IDC FY 10 Swipe, IDC FY 10 Return, Xfer from <Speed>-<Node>, Xfer to <Speed>-<Node>, etc.  It should also include a description of the use of the funds in the new area.  This is especially important for Requests to Budget.
• For the appropriate signs, see Common Journal Entry Account Codes.
• Enter the document in FMP using the Moving Budget Between Cost Centers FMP Entry Guide or Moving Budget Between Nodes in the Same Cost Center FMP Entry Guide, depending on the circumstances.
• For each cost center/budget node pair with an amount debiting from the cost center, upload a 1074.1 and confirm that there is enough in the budget node's row, Budget Available column to cover the debit.
• This bullet is not required if the budget journal is to move BUDGET ONLY or if the budget journal affects only one cost center:   For each cost center/budget node pair with an amount debiting from the cost center, upload a 1074.6 and confirm that there is enough in the Available Fund Equity row, Balance current month column (or 4th column) to cover the debit.  Note that on the 1074.6, negatives are equity in the cost center that can be debited.
• If the Travel and Business budget node is used in the journal, use the Handling Budget Journals when the Travel and Business Expense Node is Involved to ensure that no changes to B5066 are made in the entire department's budget.
• Upload the request for the budget journal, if any.
• Upload the Request to Budget form(s), signed by the Chair.
• All uploaded documents should be within one document image, but in an order associated the order of the budget journal lines for easy auditing.

Requests to Budget Forms & Instructions

• First, you need to determine whether the funds that are unbudgeted are funds that were carried forward from last fiscal year or new revenue income from this fiscal year.  Review the 1074.1 and 6 to determine which kind of request to budget you need, or both.
• Then, a Request to Budget form must be completed. 
• See the instructions on the Request to Budget Fund Balance / New Revenue - Form to complete the form, which also can be used for the Request to Budget New Revenue (notes on the differences are found in the RBNR Addendum).  Note that the Additional Fund Balance to Be Budgeted can be at most the Actual Fund Balance minus the Estimated Fund Balance on the Request to Budget form.  However, only budget what it intended to be used for this fiscal year.
• Fill out the appropriate Request to Budget Fund Balance / New Revenue - Form .  Note:  You may input New revenue received and date received over a span of time.  E.g., fees are collected over a period of time.  Source should be private gifts, royalties, student fees, tuition, or whatever the case may be. 
• Most frequently, the additional fund balance wasn't budgeted during the budget cycle either because we were not aware that the funding was coming (this in the case that funds come after April), or because we underestimated our fund balance/overestimated our previous year expenses at the time of the budget cycle.  For requests to budget new revenue, the additional fund balance wasn't budgeted during the budget cycle most likely because we were not aware that the funds would be received, or we underestimated the amount of funds that would be received.  The DBA will review before finalization.
• Use the request from the cost center manager or department staff requesting the budget in the cost center to determine how the additional fund balance or new revenue will be expended.  Be as detailed as possible.  How the fund will be used should also be worked into the journal header comments.
• Follow instructions on the Request to Budget-Budget Journal Entry to create the budget journal.
• Then follow the instructions on the Request to Budget FMP Entry Guide to enter the document into FMP.
• Upload backup in one document image to the budget journal with each Request to Budget New Revenue or Fund Balance form signed by the Chairman, then the 1074.1 and 6 of the cost center.  For multiple requests to budget in one budget journal, the order of the backup should follow the order of the line entries and each 1074.1 and 6 should directly follow the associated request to budget form.
• Requests to budget should be compiled as much as feasible into one budget journal set (one ORG journal, one REVEST journal).  E.g., two cost centers need only two journals, one ORG and one REVEST, not one of each budget journal for each cost center (not 4 total journals).

Entering and Managing Commitments in FMP

Commitments are managed in FMP.  If a new commitment is requests, use the Enter FMP Commitments 1 guide first to make sure that a commitment code for the cost center has not already been created to use, and to use it if one has been already setup.  If a commitment code/cost center pair does not exist, then follow the Enter FMP Commitments 3 to enter a new commitment code/cost center pair, and setup the current commitment.  After a new commitment is setup in either manner, use the Enter FMP Commitments 2 to post the commitment amount to the ledger side of FMP for use and tracking.  Later, you can use the Reviewing Current FMP Commitments to determine if modifications are necessary to a current commitment.

Fee Requests, Validation, Reporting, and Maintenance

Semesterly, a Fee Validation/Verification is required to ensure that fees are appropriately assessed on courses or SCH.

Annually, a Fee Reporting/Reconciling is required to ensure that fees were appropriately utilized for the intended purpose.

Guidelines were last modified 3/31/11 by Pam Muscarello.