Below are common terms and definitions that pertain to budgets.
Plan GL Codes
Plan GL codes are sometimes referred to as Plan Account Codes or Plan Cost Elements. These codes identify broad budget categories at a higher level than actual activity.
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511000-517000 |
Planned Salary Categories |
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519xxx |
Planned Benefits Categories |
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521000-570000 |
Planned Non personal Services Categories |
The Plan amount reflects the current budget (also referred to as the temporary budget) for the fiscal year.
The Plan changes when a temporary budget transfer is processed. A temporary budget transfer adjusts the amount available to spend for a specific line or category for the current fiscal year.
Within SAP you can view the date and amount of budget adjustments in the BCS Plan Line Items Report.
Budget Transfer
A budget transfer increases or decreases the budget available to spend. It provides funding to a specific area or for a specific purpose.
A debit decreases the budget available. A credit increases the budget available.
GL Account Posting/SAP Journal Entry
A GL Account Posting is primarily used as a means to correct a payment/charge that has posted to a cost center. A GL Account Posting is also used to correct a deposit made to the wrong revolving fund cost center. A debit increases cost center expense and decreases revenue recorded. A credit reduces cost center expense and increases revenue recorded.
An example of when a G/L Account Posting/SAP Journal Entry is used instead of a budget transfer is where a department provided the Bookstore with the wrong cost center for a purchase of supplies. A GL Account Posting/SAP Journal Entry is used to transfer the cost of the supplies from the wrong cost center to the correct cost center. The cost center charged in error originally had an expense (debit) posted to it. The correction would decrease expenses (via credit) for the error and increase expenses (via debit) to the correct cost center.
Organizational Unit
An organizational unit represents any type of organizational entity designated to perform a specified set of functions within the university. For example, departments will be represented by organizational units. It is by creating organizational units, and then identifying the relationships between the units, that you identify the organizational structure of the university.
Credit Expenditure
Credit Expenditure is a credit that can be directly traced to a specific expenditure and does not qualify as revenue. The credit should be applied to the cost center that originally incurred the expense.
Examples include:
- Returns
- Rebates
- Discounts given on purchased goods and services
Revenue
Revenue is the income earned from a transaction such as the delivering or producing of goods, the rendering of services, or as a result of other activities directly relating to its operations.
Position Number
A number assigned by the Budget Office identifies the specific position to which the employee appointment information is assigned within the university's organizational Human Resources hierarchy. Each position is created and maintained in SAP Organizational Management and tied to a:- Personnel area
- Job
- Pay scale type (if applicable)
- An employee group and subgroup
- Pay scale group
- Pay grade
The position number submitted on the PAF indicates the position the employee is assigned. The employee inherits the attributes assigned to that position.
Cost Element
Cost element is another term for GL account. It is a six-digit number that identifies the nature of revenue/expense. They identify broad budget categories and are at a higher level than actual activity, for example:
Subscriptions: Budget-521000, SAP-521803
Computing Supplies: Budget 530000, SAP 531900
Cost Center
A 10-digit number used to plan, gather, and track costs for a university unit or department for State-Aided (revolving and non-revolving), Auxiliary, and other fund types. Within a department, multiple cost centers may be set up to further break down expenses by project or activity.
Encumbrance
A commitment of budget via a secured means, purchase requisition, purchase order, etc.
A current year or temporary adjustment that frequently occurs is called a "Prior Year Encumbrance Forward."
The Cost Center: Revenue and Expense Summary displayed reflects totals for year-end, Periods 1-13.
The Commitments column displays the total amounts for goods ordered/secured but not yet received as of June 30. The balance (%Variance) is reduced by the amount for the commitments. The funds have been "reserved" to pay for the goods.
Since the goods will arrive on or after July 1, payment will occur in the next fiscal year. The budget for the next fiscal year is increased by the amount of the prior year's commitment.
State-Aided Carryforwards
State Aided cost objects do not automatically carry forward any surplus or deficit at fiscal year end.
The budget office works with the appropriate level of management to compute the surplus or deficit carryforward for each state-aided cost object. These carryforwards are temporary state-aided budget.
In order to get an idea of the amount of carryforward, run a revenue and expense summary without benefits in SAP. The net variance (Plan minus cumulative actual minus commitments) is the surplus or deficit forward.
State-aided cost objects are not responsible for the employee benefits which is why you need to run the revenue and expense summary without benefits.