On this page:
- The Financial Summary Report
- Other ways to monitor expenditure
- What to do if a budget is overspent
- Transfer codes
- Commitment accounting
- Additional tools that can be used
- Research grants reports/queries
All institutions are required to regularly monitor actual activity to planned activity and control their expenditure to ensure that it is in line with available funds. If required, appropriate corrective action should be taken to resolve significant differences between actual and planned activity. This section gives guidance in the techniques involved and reports available to enable interpretation of actual results against budget at a point in time. The financial jargon for this process of monitoring income and expenditure and taking corrective action is budgetary control.
The methodology for monitoring activity differs depending on whether the activity is one for which a UFS budget is set. Refer to the What budgets do we set in the University? under Budgetary Planning.
- If there is a UFS budget, institutions should review the difference between actual and budgeted expenditure. Significant variances should be resolved.
- If there is no UFS budget, institutions should investigate significant surpluses or deficits. More detail on how to monitor and control activity where there is no budget is given in Monitoring and controlling expenditure against income.
The Financial Summary Report (Cognos)
The primary purpose when monitoring expenditure against a budget is to ensure that expenditure does not exceed either the budget, or its planned or received income.
The first problem is how to spot where expenditure has, or will, exceed the budget. The easiest way for institutional administrators to spot budget problems is to regularly review the Financial Summary Report which is run via the Cognos platform. This report gives a summary of all the transaction data in UFS and provides an overview of the current financial position of the School/Institution.
For further information on this report, refer to the Finance Division Training Guidance and FAQs: Cognos GL Financial Summary report. Additionally, there is guidance on common reporting issues.
Other ways to monitor expenditure against a specific UFS budget
As well as the GL Financial Summary Report, there are other Cognos reports that deal with actual and budgeting variances. Refer to the Finance Division Training webpages Guidance and FAQs, Cognos reports, for a list of reports and detailed assistance.
What to do if a budget is overspent
If a budget is overspent the first thing to do is investigate the reasons for the over-spend. If the over-spend is the consequence solely of a timing difference, then no immediate action is likely to be required. All other over-spends will need to be resolved by identifying alternative sources of income/funds that could be used to cover the over-spend. Expenditure should then be transferred to the alternate source(s) to fix the over-spend.
Transfer codes
When transferring costs between sources of funds, it is recommended that the transfer should use the original transaction code wherever possible. However should this not be practical then the generic transfer code of EZXX can be used, but must be used on both the debit and credit side of the journal.
It is much more unusual to transfer income, indeed this is not to be done for certain sources of funds. There is a general transfer code, LXBB, for exceptional circumstances.
Further details are provided in FPM Chapter 3: Chart of Accounts and in Best Practice Guide No. 3.
Commitment accounting
A commitment is an agreement or a pledge to assume a financial obligation at a future date e.g. the funds that we are committing to spend with a supplier when we send them a purchase order.
UFS is a commitment accounting system. This means that details of any orders placed using the Purchasing module (or iProcurement) are recognised by the system and show as costs against the relevant source of funds (or research grant) even before an invoice is received. This helps to ensure that obligations against funds are shown on the system as soon as possible, thereby reducing the exposure to spending funds more than once.
In addition to the reports detailed in this chapter there is also an on-line Funds Available Enquiry within UFS that shows at any point in time the budget, actual expenditure, commitments and thus funds left on any account (or certain groups of cost centres). Refer to the Finance Division Training Guidance and FAQs, General Ledger.
Additional tools that can be used
Where finances can be managed using UFS this is the most efficient way. However, there may be times when off-line systems can add further detail/clarity. For example, trust fund managers may choose to record a simple budget for the fund on an Excel template for the upcoming year. Finance Business Partners or Institution heads of finance can assist in providing templates.
If a project is to be funded from multiple sources, again an Excel spreadsheet may be used to summarise the various income streams anticipated to match these against a budget for the project. Where Excel (or other off-line) details exist, these should be compared and reconciled regularly to details held on UFS as part of budgetary monitoring and control.
Research grants reports/queries
Cognos reports for monitoring grant expenditure at institutional level are available, including a summary report which provides an overview of grants expenditure and remaining budget on active awards. Furthermore, once-off, bespoke Cognos reports can also be run from the Grants module. For current Cognos reports that are available to institutions, refer to the Finance Division Training Guidance and FAQs, Cognos Grants.
Additional reporting is also available through the Research Dashboard and the Research Grant Expenditure Application.