What You Should Know
Performing budget and spendable balance monitoring on a monthly basis is recommended. This should be done at multiple levels of the organization (school/division, department, center or program) and across all groups of financial activity (operating, assets and liabilities as well as grants and capital projects).
Understand which funds have spendable balances controlled by expense budgets (i.e., A0000, G0001, G0002, M0001), and those for which the spendable balance is controlled by revenue or expense credits. Refer to the Fund Balance Guide for more information.
Review spendable balances relative to fiscal year-to-date activity to know if the remaining balance will be sufficient to meet year-end goals.
Utilize the Spendable Balance Reports to perform reviews for how much is available to spend. Learn more about Spendable Balance Reports. Utilize the Fiscal Year Budget vs. Actual (FIN005 and FIN006) and Account Summary reports to review income and expense by account category.
Review Activity Trends and Investigate Unexpected Items
Activity trend review serves to spot trends, anomalies, and exceptions; and to see that overall patterns of income and expense align with expectations. A monthly review of activity trends does not require a financial manager to verify and check each individual transaction. Such a review looks at summarized or aggregated totals for all transactions on one or more chartstrings.
The process includes reviewing revenue, personnel expenses, and non-personnel expenses for fiscal year-to-date as well as inception-to-date grant and capital expenditures. The purpose of the review is to find any large variations or anomalies that require further investigation. It should focus on revenues, expenses, and encumbrances that are important for achieving your department’s goals or have significant impact on your balances.
Investigating activity often entails transactional review. Note that fiscal year and inception-to-date activities may call for a different set of reviews.
A chartstring with a negative balance should be reviewed, though negative balances may be justified in some cases. When a faculty-managed chartstring (Program or Project) has a negative balance, the balance should be discussed and resolved with the faculty member. Learn to Manage Balances.