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Financial Review

Ensure accurate financial results, minimize errors, and maximize restricted funding through timely corrections and comprehensive reviews. Follow guiding principles to review financial statements and reconcile budgets. Conduct reviews periodically to maintain financial situation.

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Financial Review

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  1. Financial Review Non-Sponsored Awards

  2. Guiding Principles Review Financial Situation Periodically • Timely correction of errors and omissions • Accurately project future financial results • Minimize transactions during year-end close • Maximize use of restricted funding

  3. Timely Correction of Errors and Omissions • Standard timeline for corrections is 90 days • Helps prevent future errors and charges for clearing org suspense • Documentation is easier to locate

  4. Components of the Review • Expenditure Statement Review • Organization Suspense Account • AP Default Account • Operating Budget Reconciliation and Variance • Fund Overdrafts • Cost Sharing

  5. Expenditure Statement Review • Review should be done monthly • Make sure salaries are correctly distributed - check the Organization Suspense account • For missing non-salary expenses, check the AP Default account • Use the Financial Management Services resources at: https://web.stanford.edu/group/fms/fingate/staff/resources/courses/fin0160.html

  6. 1st Quarter Review 1st Quarter Review

  7. Operating Budget Reconciliation 1st Quarter Review • Check that the expenditure budget is accurately posted as Expense Control on the Oracle ReportMart3 179 or 285 expenditure reports in September • Check that Dean’s Office and departmental operating budget funding are accurately posted on the Oracle ReportMart3 153 Fund Statement in October (Tip – Use the data download to see the project, award, and org offsets on transfers)

  8. Expenditure Reconciliation1st Quarter Review • Reconcile the final Operating Budget “Budget Summary” Expense section and • the Oracle Expenditure Statement “Expense Control” for September by account and expenditure type

  9. Sample “Budget Summary”1st Quarter Review

  10. Funding Reconciliation1st Quarter Review • Reconcile the final Operating Budget “Budget Summary” Funding section and • the Oracle operating budget Fund Statement for October

  11. Funding Reconciliation1st Quarter Review • Dean’s Office Allocations • General Funds • Other Dean’s Office Funds • One-time Commitments • Department/Program funding • President and Provost Office funding is usually transferred later and not included in the 9/1 budget

  12. Sample “Base Funding Allocation”1st Quarter Review

  13. Sample “9/1 Funding Commitments”1st Quarter Review

  14. Funding Reconciliation1st Quarter Review • There are several ways to validate that expense control equals funding • Run the Fin Fund 253 YTD Award Status report in ReportMart3 or use FFIT • If your funding by project does not equal your expense control: • The Fin Fund 153 Fund Statement Report is the best source for detailed funding entries

  15. Funding Reconciliation - FFIT1st Quarter Review • Log-in to FFIT (ffit.stanford.edu) • Select the Organizational Accounts tab • Drill down on your Operating Budget Award

  16. Funding Reconciliation - FFIT1st Quarter Review • Compare Transfers to the Expense Control/Budget for each OB Project • This reconciliation can be done on-line or • Download to Excel

  17. Funding Reconciliation - FFIT1st Quarter Review • Compare Transfers to the Expense Control/Budget for each OB Project

  18. Mid-Year Review Mid-Year Review

  19. Mid-Year Variance Operating BudgetMid-Year Review • Check any mid-year commitment funding on the Oracle Fund Statementfor February month-end • Determine if expenditure rate is as expected on February reports • Project year-end position

  20. Mid-Year Operating Budget FundingMid-Year Review

  21. Mid-Year Operating Budget VarianceMid-Year Review • Six month expenditure variance is based on February statements • Some expenditures are primarily for the academic year October – June • Most expenses in Operations are consistent throughout the fiscal year • Check patterns from previous year(s)

  22. Components of the ReviewMid-Year Review • Expenditure Statement Review • Organization Suspense Account • AP Default Account • Operating Budget Reconciliation and Variance • Fund Overdrafts • Cost Sharing

  23. 154a Fund Statement SummaryMid-Year Review

  24. Possible Causes of OverdraftsMid-Year Review • Too much funding transferred to support Operating Budget • Dean’s Office or President’s Office funding transfers have not yet been made • Incorrect expenses or too many expenditures charged to a faculty-controlled fund

  25. Corrective ActionsMid-Year Review • Move incorrect or excess expenditures using iJournals or Labor Distribution Adjustments monthly • Pull back Operating Budget support – send request to Finance liaison as soon as possible (be sure you use the 154a report to include anticipated payout) • Transfer funding from a “like” fund to the fund in overdraft • Note anticipated funding not yet posted

  26. Allowable Fund Transfers

  27. Commitments and Fund OverdraftsMid-Year Review • Annotate your Commitments Report and return to your liaison for any commitments that you need to provide actual amounts or other information • Complete the first pass to cover fund overdrafts by annotating the 154a report with anticipated funding or corrective action • If a transfer to the operating budget causes an overdraft in an endowment fund and the anticipated payout will not cover it, you can ask your liaison to pull back enough funding to clear the overdraft - you do not have to wait until year-end

  28. Overdraft Coverage – 154Mid-Year Review

  29. Year-End Review Year-End Review

  30. Reconciling Operating Budgets at Year-EndYear-End Review

  31. Sample “Year End Close Report”Year-End Review

  32. Operating Budget FundingYear-End Review • The Fin Fund 153 Fund Statement Report is the best source for detailed funding entries • During fiscal year-end close we match funding by project to expense by project - we are no longer concerned with expense control

  33. Other Sources for OB FundingYear-End Review • Budget Planning System – Budget Summary • Dean’s Office Allocation • Departmental funding in the green section • Commitments Report • Mid-year commitments to the operating budget

  34. Operating Budget FundingYear-End Review • If not already completed in the 1st Quarter, reconcile Budget to Fund Statement • Operating Budget “Budget Summary” page • This should equal the OCT GF transfer on your fund statement by project (use data download to get source PTA data) • There are separate OCT lines for department controlled funding transfers • Dean’s Office reconciles the Faculty Salary project • Reconcile mid-year transfers on Fund Statement • Additional fund transfers during the year for mid-year funding commitments or transfers to/from other PTAs

  35. Year-End Report for OBYear-End Review • Actions you should be taking: • Review Year End Report for your OB Award to check funding and expense • Use the Fin Exp 279 Transaction Detail to check any questions about expenditure details - reports are updated daily • Add any outstanding year-end commitments from your commitments report to project year-end funding

  36. Help with ReconciliationYear-End Review If you’re having trouble reconciling your expenditures, take a look at the Financial Management Services website: https://web.stanford.edu/group/fms/fingate/staff/resources/courses/fin0160.html

  37. Complete YE Close InstructionsYear-End Review By the end of the day on the last workday of August: • Complete instructions on your 154 report for covering overdrafts • Complete instructions on the Year End Report sent by your liaison for the operating budget • Give instructions for pulling back unused restricted funding, moving general funds allocations, or adding funding as needed • You can keep it simple, or make it complex, add rows and columns as needed to make it clear (Since reports are updated daily, you should be able to project your year-end balances closely)

  38. Adjustments to OB SupportYear-End Review

  39. Operating Budget InstructionsYear-End Review

  40. Complete Revised InstructionsYear-End Review After August closes, revise instructions if necessary • Complete instructions on your most recent 154 report for covering any remaining overdrafts • Complete revised instructions on the Year End Report if there are material differences from original instructions

  41. Budget SavingsYear-End Review • Surpluses in graduate aid will be moved to the Grad Aid Savings account • Surpluses in non-base budgets should be cleared by pulling back funds to the original source • Budget savings decisions for operations projects are made by Jim Henry and Steve Olson based on the YE template and department/program reserves

  42. Cost Sharing Entries in AugustYear-End Review • Cost sharing for faculty salaries and benefits during the academic year should be covered before August Month-End (Soft) Close - please work with your liaison • Other cost sharing expenses should be covered from an appropriate departmental source – liaisons will make transfers based on your instructions

  43. Financial Review for Non-Sponsored Awards Questions or Suggestions?

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