Handbook of Business Procedures

3.2. OPERATING BUDGET

A. Development and Approval of the Operating Budget

The University of Texas at Austin prepares an annual operating budget for Educational and General (E&G) Funds, Designated Funds, Auxiliary Enterprise Funds, Restricted Current Funds, and Unexpended Plant Funds. Major construction projects included in the six-year Capital Improvement Plan (CIP) are budgeted in a separate, system-wide budget. For more information, see 3.5. Capital Budget.

General budget policies are established each year by The University of Texas System Administration and approved by UT System’s Board of Regents. Institutional-level budget planning at The University of Texas at Austin is performed by the University Budget Council, which is composed of the president, executive vice president and provost, vice president and chief financial officer, vice president for university operations, vice provost, associate vice president and budget director, deputy to the president, one faculty member, and one student member. The president and University Budget Council also seek the advice and recommendations of the deans, vice presidents, Tuition Policy Advisory Committee, Student Services Budget Committee, Faculty Advisory Committee on Budgets, Faculty Council Executive Committee, President’s Student Advisory Council, and Staff Council. Institutional budget instructions are issued by the president to the vice presidents and deans, who communicate to department heads. Deans and vice presidents may establish their own budget policies and procedures for their portfolios in addition to the institutional instructions.

Departmental budgets are prepared using the Budget Update Document (BUD), a Web-based document designed to set the budget for a specific budget group. The BUD information is used to create transactions to establish budgets in the university’s accounting information system, currently maintained in *DEFINE. Detailed information and training resources for the BUD can be found on the Budget Office Training Web page.

All budgets must be approved by the respective dean or vice president’s office for that unit. The documents are then routed to the Budget Office for review and approval. The Budget Office then submits a draft operating budget to UT System Administration for analysis and technical review to ensure compliance with current policy. The UT System Budget Office prepares a summary document for presentation to the chancellor. The annual operating budget is formally approved at the August meeting of the Board of Regents.

B. Time Lines

Each fiscal year, The University of Texas at Austin’s Budget Office develops a budget preparation calendar and posts it to the Budget Office website. Scheduled due dates for  preparing and completing budgets are established in order to meet deadlines for UT System review and approval of the budget by the Board of Regents. Specific dates will vary depending on whether it is a legislative or nonlegislative year. In general, the budget cycle follows this time line:

• March-April – The BUD is opened to departmental users.
• April-May – Departments prepare budgets and submit them to the Budget Office.
• May-July – The Budget Office reviews budgets, completes reports, and submits the operating budget to UT System Administration for review.
• August – Board of Regents considers operating budget.

C. Departmental Budgets

Departmental budget preparers must determine which accounts to include in the annual operating budget:

• E&G (14- and 20-) Accounts
  
  These accounts should be budgeted when there is a permanent funding source such as an institutional commitment, an allocation from a dean or vice president’s office, or an account transfer.
• Non-E&G Accounts
  • Designated (19-accounts) & Auxiliary (29-accounts) Funds
    
    The general rule is that a budget group should have recurring annual income of $50,000 or more to be budgeted.
  • Service Center Accounts (18-accounts)
    
    Any new service center budgets should be reviewed by Accounting and Financial Management’s Indirect Cost/Service Centers section.
  • Sponsored Projects Award Administration (26-accounts)
    
    The only departmental 26-accounts that may be budgeted are salary clearing accounts.
  • Gifts & Endowed Income (30-accounts)
    
    Estimated income for endowed 30-accounts is budgeted by using a calculation of The University of Texas Investment Management Company’s (UTIMCO) recommended long-term fund (LTF) rate (also known as the endowment or recommended payout rate) times the long-term fund units. LTF units for an endowed account can be found by using the *DEFINE GBR command to find the common trust fund 57-account that is associated with the endowed 30-account. The *DEFINE GB1 command can then be used to look up the number of LTF units for the 57-account.
    
    
    
    Income amounts are updated by the Budget Office prior to the start of the budget process for existing budgeted accounts. Gifts are generally not budgeted in individual 30-accounts.

D. Institutional Level Budgets

Since every individual budget group is not budgeted, the Budget Office creates budgets to reflect forecasted activity in all budgeted fund groups in the operating budget. These budgets are in non-numeric budget groups comprised of alphanumeric characters. They are used for preparing budget estimates only and do not exist in *DEFINE accounting records.

Part 3. Budget - Table of Contents