UCR Policies and Procedures

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Campus Policy Number:     300-64
Policy Topic:                         Principles of Resource Planning
                                        and Financial Management
Policy Owner:                      
Office of the Assistant Vice Chancellor-
Resource Planning and Budget
Date of Last Revision:        09/01/1997
Current Effective Date:       04/20/2011
A.           Introduction and Overview
At the University of California-Riverside (UCR), it is essential for each operating unit on campus to engage in meaningful resource planning and financial management in order to perform its role in supporting the mission of teaching, research, and public service. Accordingly, it is the responsibility of each unit to ensure that resource planning and financial management occurs in an effective manner at all organizational levels.
B.           Resource Planning and Budget Development
Resource planning is the process through which the strategic plan of the unit is articulated into resource terms.  This process ultimately leads to the development of the budget.  All resource planning and budget development should include the following components:
1.       Plan with Clearly Defined Goals and Objectives
The plan should be easily understood, with attainable goals and measurable objectives.  The goals and objectives should be specific enough to be integrated into the overall planning and budget process.
2.       Process for Identifying and Evaluating Key Factors Required to Accomplish the Plan
The evaluation, selection, and ultimate usage of key factors should be based on a clear understanding of the nature of the key factor and the impact it has in the achievement of the goals and objectives.  Key factors may vary depending upon each organization’s unique mission.  Examples of key factors include:
·         Student Enrollment
·         Teaching Workload (Including Faculty FTE and Instructional Assistants)
·         Salaries and Benefits (Including FTE)
·         Equipment and Supplies
·         Technology
·         Support and Auxiliary Services
·         Space Needs and Related Costs
·         Anticipated Revenue
·         External Regulations
·         Market Conditions
3.       Budget Development Process that Includes Thorough Analysis of Relevant Data and Supports Management Decision-Making
This process should ensure consistent use of proven methods for gathering and analyzing data, as well as compliance with relevant budget and financial policies.  The analysis should include the following, as appropriate:
                                       ·            Thorough Re-Evaluation of Assumptions, Analyses, Plans and Budgets Used  in Planning Process of the Previous Year
                                       ·            Examination of Budget and Financial Performance from Prior Years
                                       ·            Evaluation of Performance of Current Year Against Both Budget and Goals and Objectives
                                       ·            Identification of Modifications Required in New Plan to Reflect Changes in Goals and Objectives
                                       ·            Evaluation of Cost and Risk Factors
4.       Budget that Articulates Goals and Objectives in Resource Terms
The budget should be realistic, reasonable, and attainable and should be accompanied by a descriptive narrative.  Components of the budget and narrative should include:
                                       ·            All Funding Sources
                                       ·            Revenue Estimates
                                       ·            Major Expenditures by Category, Including Identification of Indirect Expenditures
                                       ·            Description Clearly Supporting Resource Requirements
                                       ·            Explanation of Major Assumptions and Forecasting Methods Used
                                       ·            Identification of Significant Changes in Current Operation
                                       ·            Contingency Plans
C.           Financial Management
Financial management is the process of ensuring that the financial performance of the unit is consistent with the utilization of resources as delineated in the budget developed to accomplish the objectives of the plan.  It is assumed that data integrity has been assured throughout, as set forth in (insert policy title).  Financial management should be supported through the following activities:
1.       Review and Analysis of Financial Performance
At a minimum, financial reports should be prepared by the end of the subsequent period ensuring adequate time to make adjustments or corrections.  These reports should:
                                       ·            Compare Budget to Actual Financial Performance
                                       ·            Include All Sources of Revenue and Expense
                                       ·            Provide Projections of Year-End Balances
                                       ·            Identify Problems or Exceptions
Analysis should be conducted to achieve the following objectives:
                                       ·            Ensure Expenditures are Reasonable and Necessary to Accomplish Unit Goals
                                       ·            Ensure Resources are Being Utilized Efficiently
                                       ·            Measure and Understand Financial Performance
                                       ·            Determine Whether Sufficient Resources Exist for Continued Operation
                                       ·            Clearly Identify Trends and Special Areas of Concern
                                       ·            Detect Changes in Circumstances or Business Environment
2.     Corrective Actions
Corrective action should be taken in a timely manner, as appropriate, in response to the review and analysis of financial performance.  Examples of specific corrective actions are:
                                       ·            Revising Plans or Budgets to Reflect Changes
                                       ·            Change or Eliminate Activities
                                       ·            Obtaining Additional Funding
                                       ·            Modifying Goals or Objectives
                                       ·            Altering Future Budget Assumptions
D.           Feedback
For comments or questions regarding the technical content of this document, contact the Resource Planning and Budget unit, at (951)827-3241 or visit the Resource Planning and Budget website. For all other questions or concerns regarding the document, contact the Finance and Business Operations Business Policy Coordinator via email at UCRpolicy@ucr.edu.