Review First Quarter HSDO Funding Commitments -- Finance Reminder

Dear Finance Colleagues,

We are hoping that each of you had a chance to take a break over the holiday.  As we refocus today, below is a reminder for first quarter HSDO funding commitments and some guidance to help keep the finance side running smoothly.     

  1. Review first Quarter HSDO funding commitments and contact your Finance Liaison today with any questions or changes.
  2. FY23 BPS budget data has been loaded in Oracle.  Review best practice steps.
  3. Fringe rate adjustment for the current fiscal year.  HSDO allocations have been adjusted for the current fringe rate. 

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         1)   Complete your review of FY23 first-quarter funding commitments and let us know if there are any problems or required changes. Questions  about these commitments should be directed to your Finance Liaison.

Reports are available by running the Recipient Report per the HandSOn Commitment Reporting Job Aid located on the H&S Finance Website.  Alternatively, we have loaded copies of your report into the Repository (in the Non-Salary folder under Funding Commitments) for your convenience.

Fund transfers for those commitments with a Status = Ready will be made later this month.

         2)   Your 2022/23 BPS budget data has been loaded in Oracle and OBI/FFIT. 

Confirm that the fund transfers and expense controls identified to support your FY23 operating budget are accurate:

    • Check the funding of your FY23 budget by running the OB report on the H&S Financial Dashboard (use Fiscal-to-Date NOV-2022 for first-quarter FY23 activity). 
    • Check that your expense control (budget) information has been loaded correctly from BPS into Oracle by running the Expenditure Balance Summary report from the Expenditure Balance tab of the Consolidated Expenditure Reporting dashboard in OBI.  If you use FFIT, your budget information can also be easily confirmed there as well.
    • Download an excel copy of your budget summary report from BPS (either salary or non-salary) from the H&S Repository, located on the H&S Finance site, or by following this link directly: https://finance-humsci.stanford.edu/repository.

Confirm that the fund transfers identified to support your FY23 operating budget are sustainable:

    • Review potential year-end deficits in the restricted funds used to support your FY23 operating budget by running the Non-OB reports on the H&S Financial Dashboard (use Fiscal-to-Date NOV-2022 for first-quarter FY23 activity).
    • Review your Department Reserve Reports (provides multi-year fund balances by reserve category) to confirm that the use of your one-time reserve is consistent with the strategic direction of your unit.  This may be the most valuable to review, offering a confirmation of local funding available for 2022/23 and an early indication of how your reserves are trending. 

Why Run Reports for Restricted Fund Balances at the Start of a Fiscal Year?

This is an especially good time to review restricted fund balances.  By reviewing restricted fund balances in the 1st quarter, following the start-of-year transfers that support your Operating Budget, you will be able to identify potential funding shortfalls as well as available funding opportunities for the year.

Context:

In mid‐July, during the budgeting process, each unit identified the amount of restricted funding required to support projected operations in the upcoming fiscal year.  Forecasting year-end fund balances is an essential part of that exercise to determine if there is enough funding in restricted sources to cover the needed expenses in the new fiscal year.  Because forecasting is done in June and the fiscal year ends at the end of August, there may be a difference between what was forecasted and what occurred at year-end.  Now is the time to confirm that there are enough funds in your restricted balances to support the intended expenses for FY23.     

When checking restricted balances, if you encounter deficits (shortfalls), you can identify alternate funding sources or adjust expenditure levels early in the year to avoid year‐end emergencies.  Similarly, larger‐than‐expected balances (surpluses) may highlight opportunities for additional spending or the building of reserves, etc., during the current year.

The Non-OB report, which is available on the H&S Financial Dashboard, can assist in identifying potential issues and opportunities regarding your restricted funds. This report reflects: beginning fund balances; transfers in of new revenue, gift receipts, endowment payout, and support from other units; transfers out to support your operating budget; expenses; and a projected (calculated) ending fund balance, including anticipated endowment payout for the year and outstanding expenditure commitments. Understanding the reasons for any projected deficits (or surpluses) in an ending fund balance, such as an unanticipated smaller (or larger) beginning fund balance or inflows that have not yet posted, will enable you to take appropriate actions now rather than waiting until fiscal year-end.  We have posted a user guide to running the Non-OB report from the H&S Financial Dashboard. This user guide is available on the H&S Finance site in the “How To” section or by following this link: Restricted Funding Analysis OBI Report - Job Aid.

Please contact your Finance Liaison to arrange a time to discuss any projected restricted fund balance deficits, or if you have any questions or concerns about running the reports, and thanks for your attention to these start-of-year activities.

         3)   Fringe Rate Adjustment for Current Fiscal Year.

The fringe rates for the current fiscal year have been confirmed.  During the budget process we budgeted the full RBE rate at 31.5%; however, effective September 1, 2022, the full RBE rate is now 30.9%.  This includes the combined 2.2% of TGP and supplemental fringe rate charged against Regular Benefit Eligible employee salaries for non-government projects/accounts only.  [The 2.2% contributes to the University’s fund for continuation of the Tuition Grant Program for children of faculty and staff as well as supplemental fringe benefits.]  Contingent Employee fringe was budgeted at 7.4%; effective September 1, 2022, the rate is actually only 6.9%.  Vacation Accrual/Disability Sick Leave rates (applicable to only Regular Benefits Eligible staff): Exempt, Nonexempt, and Bargaining Unit staff all remain 8.8%.  Applicable funding and expense controls have been adjusted.

 

 

Best,

Blake Grenier

Associate Director of Finance

The School of Humanities and Sciences