All institutions are required to monitor and control their expenditure to ensure that it is in line with available funds. This section gives guidance on the techniques required and reports available to enable interpretation of actual expenditure against available income at a point in time.
Institutions should investigate significant surpluses or deficits using the basic principles of budgetary control as described in Section 3, even if there is no UFS budget.
The primary purpose when monitoring expenditure against income is to ensure that expenditure does not exceed the available income. As when monitoring expenditure against budget, the first problem is how to identify which sources of funds are showing significant surpluses or deficits. The easiest way for institutional administrators to spot significant variances is to regularly review the Financial Summary Report. In addition, there are a number of other reports that may be useful, refer to the Finance Division Training Guidance and FAQs, General ledger reports section.
On this page:
Trust Funds
Income and expenditure on Trust Funds can be monitored using the Cognos General Ledger reports. However, there is a specific report for Trust Funds which summarises the purpose, performance, and activity of each Trust Fund. It is produced and distributed by the Treasury and Investments section of the Finance Division monthly following the closure of General Ledger. It pulls together information available from UFS (sums on deposit, total value of capital and deposit income) and less transparent financial information (estimated income, number of units sold or purchased). Refer to FPM13, Trust Funds, Monitoring Trust Funds.
The importance of matching income to expenditure
It is always important to have a clear picture of financial plans, both income and expenditure. The Financial Regulations state that “Heads of Institutions are authorised to incur expenditure not exceeding the limits of funds available to the Institution. They are responsible for ensuring that monitoring and control arrangements are adequate to prevent over-commitment of expenditure”. In effect this is saying that expenditure should not exceed income, or where relevant, allocated budget.
Ideally income and expenditure should be matched against each other in the same financial year, but this is not always possible due to timing differences. Where appropriate this gives rise to the need for accruals and pre-payments. Refer to FPM Chapter 11, Year-end instructions.
Spending surpluses
In some instances, accrued surpluses may be utilised to resolve accounts that have gone into deficit. It is critical to identify how the surplus has arisen and whether there are rules concerning how those funds may be used (e.g. specific donations and trust funds). Surpluses may only be used to fund allowable expenditure. FPM Chapters 3 (Chart of Accounts) and 12 (Investments) set out out more detailed rules regarding spending surpluses. It specifies when certain transaction codes are to be used. Care is required when spending trading surpluses.