To: Deans and Directors
From: Lysa Teal, Associate Vice President of Finance and Budget
Date: May 20, 2013
Subject: FY 2014 Operating Budget Spending Plan
I write to request your assistance with the development of the spending plans for each of the Units under your direction. Your spending plan is one of the building blocks necessary to construct the FY14 University budget.
As you know, we implemented the Kuali Financial System (KFS) in July 2012 to replace the legacy accounting system, FRS. As it is our first year using KFS, we are presented with both new challenges and new opportunities in the way we develop our budgets. We are providing new forms for submitting budgets that will include historic data for reference and will ask for more detailed information than in the past.
Unrestricted University Supported Accounts
Please note there is no need to submit a budget for Unrestricted University Supported Accounts (2 Ledger). In July, we will roll forward your FY13 base (permanent) budget into FY14.
The Budget Office will transfer current budget from central resources for Longevity, Shift, Snow and Ice Differential, Holiday Pay, and Accrued Sick and Vacation Pay. Departments are responsible for funding personal services, fringe benefits, and workers’ compensation costs due to reclassifications, promotions (except for AAUP faculty promotions as a result of the annual Promotion, Tenure, & Reappointment process), upgrades, reevaluations, temporary positions and refills.
Unspent, uncommitted budget funds (net of deficits) for Unrestricted University Supported accounts may carry forward from one fiscal year to the next. (Please refer to the revised Carry Forward Policy.) Budgets for FY13 encumbrances still open at the beginning of the new fiscal year will be made available as current (one time) budget at the beginning of FY14 and are included as part of the carry forward calculation. The carry forward budget is identified and recorded in September after the University’s financial records are closed for the previous fiscal year. This carry forward budget is currently capped at 2.5% of the current budget at year end, including the carry forward budget for encumbrances. Funds, if any are carried forward, will be made available to the Dean, Unit Head or Executive Level Head, as applicable. The amount carried forward will be net of any deficits, encumbrance carry forward or other budget issues in your Unit. Carry forward funds are made available as current (one time), not base (permanent) commitments.
Unrestricted Non-Sponsored Program Accounts (Self Supporting)
All Schools/Colleges/Units with budgets supported exclusively by fees and/or self-generated revenues must submit FY14 spending plans by account using the Budget Submission Form. In KFS, we will be able to budget not only for revenue and expenses but “transfers in” and “transfers out” of individual accounts. This will allow us to have a clearer picture of fiscal plans and expectations for your Units.
This year, we will be supplying individual forms for these accounts with FY12 and year-to-date FY13 actual data to assist you in the budget process. Per the SEBAC agreement, there will be collective bargaining salary and wage increases in FY14. Information on these increases will be provided and can be found on the Budget Office website.
Each School/College/Unit’s budget should balance on an annual basis. Please note that any spending plan which relies on the use of a prior year fund balance will be closely scrutinized. In addition, increases in budget during the fiscal year need to be reviewed and may not be approved. I ask that you consider these points before submitting your plans. Also, if you anticipate any significant changes in your operations from the prior year, please inform your Analyst. Each of these factors significantly impacts the FY14 budget. Budget submissions are due by June 14, 2013.
The official memo with the University Programs fringe benefit rates for FY14 will be published as soon as we receive information on the retirement and health insurance components developed by the State of Connecticut Office of the State Comptroller. We typically get these rates at the end of June. The estimated fringe benefit rate table on the Budget Office website simply takes current rates and inflates them based on past experience. For now, budgets should be submitted using these estimated rates.