Institute Budget Preparation Authority and Amendments

Institute Budget Preparation Authority and Amendments
Type of Policy
Administrative
jbarber32 Wed, 06/27/2012 - 16:21
Last Revised
Review Date
Policy Owner
Institute Budget, Planning and Administration
Contact Name
Jamie Fernandes
Contact Title
Executive Director
Contact Email
jamie.fernandes@business.gatech.edu
Reason for Policy

The purpose of this policy is to define the Institute’s basic budget preparation and management requirements, which are governed by the University System of Georgia.  Institute Budget Planning and Administration or "Budget Office" manages the budget process under the direction of the President and the Executive Vice President for Administration and Finance. The office’s functions are to plan, prepare, maintain, monitor, and report on all institutional budgets at Georgia Tech according to established institutional and University System of Georgia (USG) policies.

The Georgia Tech budget presents the priorities of the Institute in terms of dollars and services provided. The Institute establishes an annual operating budget and a capital budget, which span the state-established fiscal year of July 1 through June 30.

  • The operating budget contains funding for recurring programs such as instruction, research, public service, and support services. The operating budget contains revenue from all sources, including tuition, student fees, state appropriations, and sponsored (grants and contracts) revenue.
  • The capital budget contains major investments in fixed assets, including land, buildings, and equipment, is funded by various earmarked sources. In many cases projects funded in the capital budget span two or more years.

The Board of Regents (BOR) annually approves the Institute’s operating and capital budgets, as well as its tuition rates, mandatory and selected other fees, and state allocations. Any allowable budget changes made during the fiscal year must be processed through an amendment process managed by the Budget Office.

The Board of Regents (BOR) of the University System of Georgia (USG) assigns to the Georgia Tech President the responsibility for planning and administering all programs and the related Institute budgets, as indicated in the BOR Policy Manual Section 2.6.1. The President delegates the budget and planning responsibilities to the Provost, Executive Vice Presidents, and Vice Presidents. This responsibility is further delegated to these executives’ direct reports, including deans and other division heads. 

Original Budget Preparation and Approval

The Budget Office is required to follow an established set of guidelines and policies set forth by the State of Georgia and the Board of Regents. The BOR guidelines are found in Section 7.2 (“USG Budget”) of the Board of Regents’ policy manual and Section 8.0 (“Budget Process”) of the USG Business Procedures Manual (BPM). A summary of key portions of the BOR policy and business procedures pertaining to the Original (base) Budget follows:

BOR Policy Manual 7.2.3 – Operating Budgets – annual preparation and submission of an annual budget to the Chancellor with funding from all sources;

BPM 8.5.3 – Budget Preparation at the Institutional Level – institutional development of the proposed budget by personal services, fringe benefits, and other expenses to the BOR following establishment of internal priorities;

BPM 8.5.4 – Submission of Proposed Budget – budget submission by the following major categories (fund groups): 

  • Education and General – budgets that are not any of the categories below
  • Auxiliary Services – business-like service organizations such as housing, dining, and transportation
  • Student Activities – funded by separate, mandatory student fees for campus recreation, the student center, and student organizations
  • Capital – major capital expenditures including land and land improvements, buildings and building improvements, and infrastructure;

BPM Section – 8.5.5 Board Approval of Institution’s Original Budget – Approval by the BOR of the final institutional budgets by the major categories listed in BPM 8.5.4. 

Budget Amendments

As funding circumstances change during the fiscal year, the Institute implements internal budget amendments, in close coordination with Institute operating units. Any amendments involving an increase or decrease in the overall Institute revenue must be approved by the President. These amendments are initiated by the Budget Office or by campus units, with subsequent approval by the Budget Office.

The Budget Office consolidates all internal Institute amendments for each quarter for submission to the Board of Regents on a summary basis. It is critical that the “expenditure authority” approved by the BOR be consistent with the official Georgia Tech budget, including an accurate breakdown of the budget between personal services and non-personal services. Failure to maintain this consistency may result in an audit exception. It is critical for every Institute unit to maintain a budget that closely resembles the expected year-end spending, including the distribution of dollars between personal services and non-personal services. The following are excerpts from key USG Business Procedures Manual sections (USG Business Procedures Manual Chapter 8.6)

8.6 Budget Amendment – The budget amendment process is critical to ensuring that expenditures made during the course of the fiscal year are supported by budgets. Failure to amend budgets to meet changing circumstances may result in an over-expenditure of funds and lead to audit findings.

8.6.2 Revenue Adjustments – Throughout the fiscal year, various factors necessitate the adjustment of revenue estimates within the budget system. For example, if fall semester tuition were to exceed the original budget estimate, the institution would amend its budget to reflect the increased revenues. Revenue estimates are reviewed and amended on a quarterly basis to reflect projections of either increased or decreased revenue collections during the fiscal year.

8.6.3 Appropriation Amendments – The definitive expenditure authority within the financial system resides at the appropriation level; expenditure authority cannot be exceeded. At a minimum, allocations are in place for personal services and operating expenses.

NOTE:  See Georgia Tech’s Budget Amendments policy and the links in the next section for more information.