Budgeting

1. Overview

2. Budget Advisory Committee

3. Budget Functional Groupings

4. Budget Model

5. Discretionary Revenue

6. Non-discretionary Revenue

7. Expense Budgets

8. Management Reporting

 

 

1.  Overview

 

The University Budget is prepared annually and reflects the distribution of all revenue projected to be received in the coming year.

 

The Budget planning cycle begins in March, managed through the University’s Budget Advisory Committee.  The Budget is formally endorsed by the Core Planning Group, considered by the Senate Standing and Finance Committee and submitted to Senate for approval.  In September of the Budget year managers are advised of draft allocations in advance of formal Budget approval in order to plan for the coming year. 

 

 

2.  Budget Advisory Committee

 

A Budget Advisory Committee (BAC) oversees the development of the Budget and reports formally to the Vice-Chancellor through the Core Planning Group.

 

The membership and terms of reference of the BAC are as follows:

 

Membership

  • Executive Director, University Services (Chair)
  • Director of Finance
  • Deputy Vice-Chancellor (Academic Affairs)
  • A member of the Executive Team, who is not a member of the CPG

Terms of Reference

  • To explore alternative budget formulations within the framework of strategic priorities.
  • To provide formal recommendations to the Vice-Chancellor for consideration.
  • To report on the efficacy of the Budget process to the Core Planning Group.
  • To report routinely to the Strategic Review Committee.

 

3.  Budget Functional Groupings

 

The main functional groupings for budget purposes are:

  • Vice-Chancellor
  • Deputy Vice-Chancellor (Academic Affairs) - (Including Faculties)
  • Deputy Vice-Chancellor (Research and International)
  • Deputy Vice-Chancellor (Quality and Outreach)
  • Executive Director, University Services
  • ACUcom
  • Capital
  • Overheads

 

4.  Budget Model

 

The purpose of the budget model is to determine University-wide revenue and make appropriate allocations to the main functional groups. The budget model has two revenue components, discretionary revenue and non-discretionary revenue. 

 

The Budget distributes ‘discretionary’ revenue across functional headings and Overheads as a percentage share of total discretionary revenue.  The percentage share is based on a percentage distribution across areas that applied in 2003 and adjusted each subsequent year to reflect changes in structure or strategic direction that have significant financial implications.

 

The distribution of revenue is based on a projection prepared well in advance of the coming year.  As a result, there is a mid-year budget review of revenue, a revised projection for the year is prepared and an adjusted budget allocation is distributed to each management centre. 

 

At the end of the budget year, the surplus/deficit between actual revenue and expenditure results in a carry forward of funds to the following year.  This carryforward includes any variation between the revised mid-year Budget and final year actual revenue.  So as to provide greater flexibility to plan for the future, unrestricted carryforward of funds is assumed.  Funds available each year therefore comprise the annual budget allocation plus carry forward funds from the previous year.

 

A University Contingency (Central Overhead) allocation funds unforeseen cost increases.

 

 

5.  Discretionary Revenue

 

Discretionary Revenue is defined as revenue not earmarked to specific project or research activities.  Discretionary revenue includes funding from the Government Operating Grant, full fee paying revenue, investment income, Student Services fees and other miscellaneous revenue but excludes Capital funds, DEST funded research projects, faculty consultancy and project accounts and ACUcom operating activities (Central Overheads are funded from Discretionary revenue and are a first call on funds available).

 

Departmental budget allocations are distributed to areas on a monthly basis.

 

Central Overheads

 

Central Overheads are defined as significant University expenses generally of a strategic nature largely applicable to the whole University.  The funding of Central Overheads is a first call on Discretionary Funds.  The breakdown of Overheads is as follows:

  • Emerging Cost Superannuation
  • Maternity Leave
  • Student Associations
  • Information Technology Infrastructure
  • University General Overheads
    • Audit, Accounting, Bank Fees & Miscellaneous
    • Insurance
    • Copyright & Memberships (Corporate)
    • Memberships (AHEIA), Exec Appointments
    • Exam Supervision
  • Project Funding
  • VC's Initiative & Strategic Funds
  • Transfer to General Reserve
  • University Contingency

Faculty Distribution

 

The distribution of the Faculty percentage share of discretionary revenue is determined by the Deputy Vice-Chancellor (Academic Affairs).  The distribution has two parts. The distribution of the non-fee component is based on teaching load (WEFTSU).  The amount of fee revenue allocated to faculties is distributed based on faculty determined projected revenue for each discretionary fee type.  The allocation of total funds within the Faculty is then determined by the Dean.

 

Administration Distribution

 

The Budget provides a base allocation to the Vice-Chancellor, Deputy Vice-Chancellors and Executive Director, University Services for distribution to their areas of responsibility.  The Deputy Vice-Chancellor (Academic Affairs) is responsible for the allocation of funds to faculties and the Library.

 

 

6.  Non-discretionary Revenue

 

The Budget model also includes an estimation of the ‘non-discretionary’ revenue.  Non-discretionary revenue is defined as revenue earmarked to specific project or research activities.  It includes Capital funding, DEST funded research projects, DEST specific purpose grants, faculty consultancy and project accounts and ACUcom operating activities.  A portion of Non-discretionary revenue, including certain income received directly by departments and projected profit from ACUcom forms part of the budget allocation process.

 

Capital funding

 

Capital expenditure and related funding is accounted for in the University’s Capital Management Plan.  Revenue is allocated annually from the Budget to fund expenditure, including financing costs on capital projects.  The principal sources of funding include DEST capital grants, a capital contribution based on 14% of overseas student fees, car parking fees and a contribution from Other Operating Revenue.

 

Non-discretionary Revenue other than Capital

 

Non-discretionary revenue includes funding for DEST funded research projects such as:

  • Discovery grants
  • Linkage projects
  • Research Fellowships
  • Strategic Partnerships with Industry grants

DEST specific purpose funding is received for Indigenous support, the Indigenous Tutorial Assistance Scheme and Indigenous Education Strategic Initiatives Programme.

 

Specific project funding and faculty consultancy revenue, primarily from the provision of services to external parties by academic staff forms part of non-discretionary revenue.

 

 

7.  Expense Budgets

 

Following the allocation of the annual Budget plus carry forward funds from the previous year, an expense budget is developed by each area.  Approximately 75% of operating expenses are salary related, so it is imperative that departments are aware of future staffing commitments.  To this end, a staff profile is developed to provide each functional unit with an estimation of contract and permanent staff commitments for the coming year. The staff profile takes into account future enterprise bargaining increases, incremental progressions, allowances, on-costs, and leave loading entitlements for each staff member.  Casual staff do not form part of the staff profile and must be calculated separately.  Staffing commitments should be considered first in the development of an expense budget. The other component of an expense budget is the anticipated non-salary and asset expenditure. Templates with all expense account codes are provided to departments to break down their expense budget in an appropriate manner.

 

As noted above, expense budgets are broken down across multiple account lines, at the discretion of the management centre.  All budgets entered into the Financial Management System balance to zero.

 

 

8.  Financial Management Reporting

 

A suite of Financial Management reports, updated each day, are available on the Web which enable financial users to review their financial position against funds available.

 

Principal report formats include:

  • Budget (Annual Allocation plus Cary forward) versus Year to Date Expenditure
  • Year to Date Revenue versus Year to Date Expenditure.

For further information please refer to Financial Management Reporting on the Finance Directorate web-page. 

 

 

 

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