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Budget Ownership and Basic Budgeting Concepts

The MAP financial system provides for expense and revenue budgets to be built for a single fiscal year in the General Ledger (GL).  These budgets do not include grant and contract budgets built in the Grants Module (OGM).  Typically, the funds that are associated with the GL budgets are categorized as either Centrally Controlled Funds or Non-centrally Controlled Funds. Centrally Controlled Funds are allocated, usually through an Allocation Letter, by the General University, the Health Sciences Center, or one of the regional campuses.  Non-centrally Controlled funds are those funds where the revenue is generated by an operating unit and the fund balance is retained by that unit at year end.  The unit that retains the fund balance and is responsible for generating the revenue is referred to as the Fund Owner. In some cases, one operating unit may allow another operating unit to spend from a Non-centrally Controlled Fund owned by the first unit.

Overall budgeting concepts are the same regardless of the GL fund.  The issue becomes the determination of which unit is responsible for the various tasks. Fund Owners, including the owners of Centrally Controlled Funds, are responsible for establishing revenue budgets in line with revenue expectations.  They are also responsible for determining the anticipated Beginning Balance.  The sum of estimated revenue and estimated Beginning Balance serves as the upper limit for the establishment of the expense budget.  If units other than the respective Fund Owners are to be authorized to spend from these funds, an Allocation Letter is issued or some other means of communicating the allocation is used.  All units are responsible for establishing appropriate expense budgets based upon the amounts authorized by the Fund Owner.  In most situations with Non-centrally Controlled Funds, the unit establishing an expense budget is the Fund Owner.  An outline of these concepts appears in Appendix A-1, while an example and corresponding description appear in Appendices A-2 and A-3.

These relationships hold true for all GL budgets.  The key to the application of the process lies with the determination of which unit owns each fund that is to be used in support of an expenditure budget.  It is not uncommon for a unit to receive budgetary authority through three different approval flows.  In the first flow, the unit receives an Allocation Letter authorizing it to establish expenditure budgets on Centrally Controlled Funds.  In that case, the Fund Owner is Central Administration and revenue budgets are established in a set of central accounts.  In the second flow, the unit is the Fund Owner of one or more Non-centrally Controlled Funds and is responsible for establishing expenditure and revenue budgets on these funds.  In the third flow, a hybrid of the first two, the unit receives authorization from another Fund Owner allowing the first unit to establish an expenditure budget on the Non-centrally Controlled Fund of the other Fund Owner.  In this case, the Fund Owner is another unit and the revenue budgets associated with this fund are established in the accounts of this other unit.