Budgets & Forecasting

Planning Process (Budget Setting):

Budgets are set  for each area as part of the annual planning cycle.  The overall University budget is approved by Council in June each year for the imminent financial year from 1st August to 31st July.

A timetable will be issued from the Planning Office which sets out the key tasks and dates for the planning process.  Typically the process is from December to May.  The planning period covers reviewing the current year forecast and agreeing a budget for the next year as well as the three years after that.

First key steps will be to agree student number targets.  This is done in consultation with the Planning Office and College Office.  The Management Accountants are able to assist with financial data (historic student numbers, fee income etc.) needed to help with these discussion.  This forms the basis of calculating the tuition fee income.

Once student numbers are agreed the planning template for each department is populated by their Management Accountant.  This calculates income, staff costs, non-staff costs, research grants and contract contribution and DDF income and expenditure.  The Management Accountants work closely with the College and the Departments to populate the planning templates.  There may be some adjustments required to the initial numbers throughout the process as the University tries to meet its overall target contribution.  Extra income may be needed or additional savings in the challenging climate we are in.  Investment bids are also discussed as part of the process and the Management Accountants will assist with required business cases.

Final budgets are agreed by Finance Committee and Council around June.  These budgets will then be uploaded onto SAP, for departments to monitor against,  for the start of financial year – 1st August – and used to monitor monthly performance against.

Budget Queries

Budget Queries should be addressed to the Financial Reporting Team.

Allocating Budgets:

When budgets are allocated to individual 'cost centres' (an account for collecting costs funded from core budget allocations) or teams, the following steps should be taken:

  • if appropriate, the initial budget should be compiled with the participation of whoever will be responsible for its control and performance
  • the outcome of any budget decisions should be communicated to all relevant staff
  • responsibility for each element of the budget allocation should be delegated to a named individual
  • the named individual will normally be the person authorised to approve expenditure against the cost centre. If not, the department should be clear on who is monitoring expenditure against budget and/or is accountable for the use of the budget.

Responsibility of Budget Holders:

Budget holders have the following responsibilities:

(i)  Financial Regulations  Budget holders must ensure that expenditure is incurred in accordance with the Financial Regulations, this includes ensuring that goods and services are procured in line with the regulations and procurement policy.
(ii)  Budgetary control  Budgets represent a considered assessment of how much the University is able to allocate to funding particular activities, after taking account of all relevant factors. Budgets will, therefore, not automatically be increased for any unforeseen changes. Budget holders must not make commitments which will result in an overspend against the budget, unless prior approval has been given. The reasons for any overspend should be documented and reported to the Head of Department or Head of College and where possible steps should be identified to make savings to bring the spend back within budget. Budget holders who do not demonstrate budgetary control may lose budget responsibility.
(iii)  Coding  Budget holders must ensure that all transactions are coded correctly. This ensures the Finance system reports spend against the most appropriate area and spend is matched to budget.
(iv) Value for Money  Budget holders are expected to seek to use resources economically, efficiently and effectively so that maximum benefit can be gained from the funds and that the funds are used for the purposes given.
(v)  Authorisation of Expenditure  Arrangements should be in place to ensure that expenditure is properly authorised and the risk of fraud is minimised.
(vi)  Safeguarding of Assets  Budget holders are required to keep adequate records of equipment purchased and to periodically carry out checks of the stock of these items.
(vii)  Accuracy of records  Budget holders must monitor and control spend, where coding errors are identified these should be notified to the Finance team for correction via journal. Budget holders will be required to provide information for the year end process to ensure all goods and services are accounted for in the correct year. The year-end requirements are notified to all SAP users during June & July each year by the Finance Office.

 

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