Overview Regarding Budgetary Control and Funds Checking

1.  General

This overview does not cover Research Grants and Contracts or Estates and Facilities Capital/Long Term Maintenance Projects.

2.  Budget Organisations

The system uses a concept call Budget Organisations.  Each budget organisation represents a unique entity within UCL to which specific accounts are assigned.  Although many separate budget organisations can be created UCL currently only uses one (entitled ‘ALL’) which is controlled by Finance Division.

3.  Budgets

At present only one set of budgets has been created.  This has been given the title ‘College’.

All budgets are posted to a specific budget field unlike the previous system where budget allocations were treated as income and posted as transactions alongside any other income and expenditure.

The ‘College’ budgets are maintained by Planning and Management Accounts staff but Departments can request changes and transfers within their own codes.

The original plans were to introduce separate ‘department’ budgets for use with the funds checking facilities and to give department the flexibility to present their budgets in a different way.  These plans have now been shelved for the time being.

4.  Funds Checking

UCL does not currently use the funds checking facility in an active way and is unlikely to do so with the current version of the software.  The level of funds checking is currently set to ‘None’ and the following description is provided for information only at this stage.

Funds checking is a facility that enables the system to check that funds are available, after taking account of budget less expenditure and commitments to date, before a transaction is approved.  Commitments are described as ‘encumbrances’ in the Oracle system,

It may be applied at the purchase order approval stage, the invoice entry stage (where for example, the invoiced amount is higher than the purchase order amount), or when journal transfers are made, or all or any combination of the above.  There are three levels of funds checking.

• None: no funds checking.

• Advisory: a warning message.  “You have passed funds checking with advisory warning”, is displayed if there are insufficient funds available, but the approval of the transaction eg purchase order, is completed.

• Absolute:  The message “Failed absolute funds checking” is displayed if thee are insufficient funds available.  The transaction approval is not completed.

Funds checking can be applied at various levels including account segment eg ABO1 or account plus analysis code segment level eg ABO1 6D0.

5.  Monthly Reporting

Departments currently receive the following monthly reports:

a)      Balances

Details of budgets and expenditure for the year to date, at analysis code level.  Distributed by Accounts Payable section.

b)      Income and expenditure transactions

Details of transactions for the month to reconcile to the total shown on the balances report.  Distributed by Accounts Payable section.

c)      Budget transactions

Details of any changes to the budget during the current month.  Distributed by Accounts Payable sections.

d)      Departmental Summary

High level summary, at account code level, providing details of budget and expenditure to date.

Distributed by Planning and Management Accounts section.

Migrated Departments are able to access the system on line to view relevant details and to print reports locally.

6.  Year End Procedures

At the end of each financial year, the following action takes place:

• Encumbrances are rolled forward into the next financial year.

• Overspends or underspends (Actual minus Budget) are rolled forward as budget adjustments in the new financial year.

This page last modified June 3, 2011 by Web Editor