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Selected
Policies / Guidelines
Principles of Financial Management 
Accomplishing the University's mission to promote teaching, research,
and public service requires that Administrative Officials carefully manage financial resources in a prudent and cost-effective
manner. Accordingly, each Administrative Official is
responsible for adhering to the following principles and responsibilities:
Principles
| A. |
An
annual budget must be established to provide a tool to:
| 1. |
project
resources necessary to achieve a unit's goals and objectives, |
| 2. |
measure
current financial performance and guide operations, |
| 3. |
discover
significant transaction errors, and |
| 4. |
detect
substantial changes in circumstances or business conditions. |
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| B. |
A budget must be realistic, reasonable, and attainable. |
| C. |
Units must operate within their budget. If expenditures
should exceed budget, justification for such excess must be
provided. A formal
plan to eliminate deficit balances must also be developed.
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| D. |
Funds
must be expended in accordance with all relevant policies, rules,
regulations, and contractual terms.
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| E. |
Actual
financial results must be compared to the budget on a regular
basis to ensure that transactions are reasonable, accurate,
and adequately supported, and that unnecessary costs are being
avoided. |
| F. |
When
actual financial results vary significantly from the budget, Administrative Officials or their designees must determine
the cause, evaluate
the activity, and take corrective action. |
| G. |
Administrative
Officials or their designees must provide adequate safeguards
to protect against the loss or unauthorized use of University
assets. |
Responsibilities
Planning and Budgeting
Good planning and budgeting means:
| A. |
having
a mission statement that is simple, attainable, and includes
measurable goals for each unit; it should be easily integrated
into the overall planning and budgeting process |
| B. |
having
a process for identifying, implementing, and evaluating activities
required to achieve the University's goals |
| C. |
consistently
using proven methods for gathering and analyzing data |
| D. |
incorporating
sufficient detail and descriptive narrative in developing budgetary
plans to clearly portray how all of the unit's operations are
being financed, including:
| 1. |
all
funding sources |
| 2. |
revenue
estimates |
| 3. |
major
expenditures by category |
| 4. |
major
assumptions and forecasting methods used |
| 5. |
significant
changes in current activities |
| 6. |
contingency
plans. |
|
| E. |
employing
cash management practices that maximize the cash resources available
to the University |
| F. |
identifying and assessing organizational
and business risks |
| G. |
annually
re-evaluating current and future budget requirements |
Responsibilities
Monitoring and Evaluating Financial Data
Effective
monitoring and evaluating financial data means:
| A. |
ensuring
that monthly financial reports
| 1. |
are
appropriate and accurate |
| 2. |
are clear,
concise, and detailed |
| 3. |
specify
all sources of revenue and categorized expenditure data |
| 4. |
provide
comparisons of budget versus actual fiscal activity |
| 5. |
highlight
exception items and
clearly identify trends and special areas of concern |
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| B. |
employing
a process for reviewing revenue and categorized expenses at
the end of each ledger cycle.
|
| C. |
employing
a process for reviewing a sampling of financial transactions
to ensure transactions are appropriate, correctly coded, and
that adequate supporting documentation is provided
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| D. |
employing
a process for investigating transactions that significantly
deviate from policies or regulations, budgetary or planning
expectations, or commonly accepted practices
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| E. |
employing
a process for taking corrective actions such as:
| 1. |
revising
plans or budgets to reflect changed circumstances |
| 2. |
changing
or eliminating activities |
| 3. |
obtaining
additional funding |
| 4. |
modifying
goals or objectives |
| 5. |
correcting
transaction errors |
| 6. |
modifying
future budget assumptions |
| 7. |
implementing
new control procedures |
| 8. |
documenting managerial decisions that depart from the
budget |
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Responsibilities
Financial Risk Assessment
In
pursuing opportunities to improve the effectiveness and/or cost efficiency
of financial controls, risks and benefits must be appropriately balanced.
Effectively identifying and managing these risks means:
| A. |
understanding
the relationship between the mission of the University and the
mission of the unit |
| B. |
understanding
the key activities that take place in a business process |
| C. |
identifying
the likelihood and magnitude of risks that might cause the business
process to fail
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| D. |
identifying
the factors that contribute to risks that are determined to
be critical |
| E. |
identifying
and implementing strategies to manage the factors contributing
to the critical risks so that the mission of both the University
and unit can be successfully achieved |
Responsibilities
Safeguarding University Assets
Effectively safeguarding University assets means:
| A. |
securing
cash, checks, or cash equivalents held in the unit, making timely
deposits of all cash receipts to the Main Cashier's Office and
investigating and reporting all cash discrepancies |
| B. |
maintaining
current equipment records, conducting a biennial physical inventory
of all inventorial equipment, and ensuring that all asset adjustments
are approved by an appropriate employee |
| C. |
regularly
monitoring accounts receivables and employing a process for
identifying and pursuing collection on delinquent accounts |
| D. |
prudently
expending cash for goods and services consistent with fulfilling
the teaching, research, and public service mission of the University |
REFERENCES
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