The University of Memphis
Budget Policy and Procedures
The University of Memphis operates under the authority of the Board of Trustees and follows the fiscal policies set by that Board and the Tennessee Higher Education Commission (THEC). The operating budget must be approved by the President and the Board of Trustees in advance of its implementation. TBR shall give final approval to the operating budget of the University to ensure the ability to satisfy both contractual obligations to the Tennessee State School Bond Authority and obligations to that authority’s bondholders.
Budget control is essential for effective financial management of any organization. It is the purpose of this policy to provide clear and specific responsibility for proper budget management and control. It is the control mechanism of budgeting that is the focus of this policy.
Funds the University retains full control over for use in achieving any of its authorized institutional purposes.
Funds that are required to be used in a specific way or for a specific purpose.
|Educational & General (E&G)|
Core functions necessary to support the teaching, research, and public service missions of the University.
Self-supporting enterprises that furnish services to students, faculty, and staff. Example include housing, bookstores, food services.
The original budget prepared in the spring that is for the fiscal year to begin July 1.
This budget is a revision of the proposed budget. It is prepared as of October 31 after actual fall enrollments and other estimated costs and closing balances are known.
This budget is the final budget submitted for the current year operations. It is submitted in the spring at the same time as the Proposed Budget for the coming year. This is the final approved budget for the University and therefore contains the control totals against which final year-end amounts are compared.
Approved formal plan for financing the University’s academic and support programs for the fiscal year beginning July 1 and ending June 30 of each year.
|Unexpended Plant Funds|
Used for the construction or acquisition of physical properties for institutional purposes.
|Renewal and Replacement|
Funds set aside for major maintenance items.
|Retirement of Indebtedness|
Funds set aside for the retirement of indebtedness on institutional property.
Refers to the creation, maintenance, and monitoring of positions and their budgets. A position budget is established to monitor and control budgets for employee pay assignments.
|Submission of Budgets|
The annual budget cycle includes the following processes:
The University’s annual request for state appropriations is made to the Tennessee Higher Education Commission (THEC) in September. This request includes both capital and operating sections. The Campus Planning and Design office prepares and submits the capital budget request. The Office of Financial Planning coordinates the submission of the operating request which includes detailed statistics on student progression, degrees granted, research expenditures, facilities, square footage, utilities expenditures, and other aspects of University operations that THEC uses to develop the formula component of the Tennessee Higher Education Commission recommendation for state appropriation.
Development of the Proposed Budget begins after the Governor’s proposed budget is published (usually in early February). Detailed Academic and Administrative budgets are developed; consolidated into a budget for the entire University; and subjected to detailed analyses, review, and approval.
The Vice President of Business and Finance or designee shall present the Proposed Budget to the Board of Trustees for review and approval before the beginning of each fiscal year. It is customary to present this proposal after the General Assembly has enacted the appropriations bill for the upcoming fiscal year. The University will submit the final Board of Trustee approved Proposed Budget to TBR as soon as practical. TBR shall give final approval to the operating budget of the University.
The University shall submit a Revised Budget to the Board of Trustees for review and approval reflecting revisions made through the end of the first quarter of the fiscal year. The Revised Budget includes adjustments made to show:
The Vice President of Business and Finance or designee shall present the Revised Budget to the Board of Trustees for review and approval at its winter meeting. The University will then submit the final Board of Trustee approved Revised Budget to TBR as soon as practical. TBR shall give final approval to the operating budget of the University.
|Estimated Budget (Final Budget)|
This budget is the final budget submitted for the current year operations. It is submitted in the spring at the same time as the Proposed Budget for the upcoming year. This is the final approved budget for the University and therefore contains the control totals against which final year-end amounts are compared. Once approved, cumulative budget transfers between functions in excess of 1% of the approved functional expenditure budget require prior approval of the President.
The annual operating budget is the approved formal plan for financing the University’s academic and support programs for the fiscal year beginning July 1 and ending June 30 of each year. It is the policy of the University that the annual operating budget shall:
The purpose of the Unexpended Plant Funds is to account for the unexpended resources derived from various sources to finance the acquisition of long-term plant assets and the associated liabilities.
|Renewals and Replacements|
Resources set aside for renewals and replacements, as distinguished from additions and improvements to plant, are accounted for in this fund group.
Auxiliaries who have the responsibility to replace equipment must transfer at least 5% of the auxiliary gross margin to the renewal and replacement fund.
Generally, the only non-auxiliary units that establish renewal and replacement funds are Information Technology and departments operating vehicles or major equipment.
|Retirement of Indebtedness|
The purpose of this fund is to account for the accumulation of resources for interest and principal payments and other debt service charges relating to plant fund indebtedness.
Additions to this fund are to be setup in separate debt service accounts.
The President will recommend budget guidelines annually to include Revenue assumptions (primarily state appropriations and tuition and fees), carryforward policy, and Athletic subsidy and will be approved by the Board of Trustees.
Any changes to the current approved budget can be made with a budget revision. All budget revisions must:
Position control is a part of the personnel budget process. The number of authorized permanent positions at the University is controlled within unrestricted education and general units and auxiliaries.
Controls exist on the total number of positions at the institution and on the classification of those positions (administrative, faculty/academic, professional, and clerical/support). All position count changes are reported to the Board of Trustees each year in both the proposed and revised budgeting cycles.
|Roles and Responsibilities|
Board of Trustees
The University Board of Trustees has authority to approve the operating budget and set the fiscal policies for the University.
The President has ultimate responsibility for leading the University financially.
Vice President, Business and Finance
The Vice President, Business and Finance of the University supports the President by providing leadership to the University’s financial operations.
Financial Planning Office
The Financial Planning Office coordinates technical aspects of the University’s ongoing budgetary processes and procedures under the direction of the Vice President, Business and Finance. This includes issuing guidelines, schedules, and budget communications to campus financial managers; developing the University’s annual appropriations request, proposed budget document, and revised budget document.
The Financial Manager of a unit to which funds have been allocated is responsible for ensuring that all expenditures remain within the amount budgeted and revenue budgets are met or expenditures appropriately adjusted when revenue budgets are expected to fall short. Financial managers have no authority to expend funds in excess of approved budgets.
The operating budgets will be strictly adhered to in the administration of fiscal affairs. No official is authorized to make firm commitments or incur obligations unless budget provisions have been authorized.
Any exceptions to these policies should be directed to the Office of Financial Planning.
|TBR Consideration of University Budgets Policy|
| ||UM1768 -- Revised February 9, 2017|
UM1768 - April 29, 2014
|Academic||Finance||General||Human Resources||Information Technology||Research||Student Affairs|
| || || || || |