Financial Services Manual (FIN)

Effective: 7/1/1993

Revised: 3/1/2005

FIN 210: Business Manager Responsibilities

Purpose

To describe business manager responsibilities for reviewing financial reports

Source

University policy

Applicability

Business managers and others performing business manager functions

Policy

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Monthly Financial Reports

Business managers must review the monthly financial reports for their areas, including lower-level operating units. This review may include a review of monthly rollup reports or other available monthly reports where rollup reports are not available. The monthly reviews typically should be done within 30 days of the report preparation date (in the upper left-hand corner of the report). Business managers should:

1. use the procedures provided below in their review of the monthly financial reports

   or

2. develop their own written procedures for identifying significant financial variations.

If significant financial variation is apparent, the business manager must determine the cause for the variation, take corrective action in a timely manner, and report the variation to higher-level management (for examples of the types of variations, see “Significant Financial Variation” and “Insignificant Financial Variation” below).

Note:

Financial irregularities may or may not cause any significant financial variation in the accounting records. Financial Services will notify university management of any significant financial variations that come to attention of the office.

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Org Manager Responsibilities

In addition to reviewing the monthly reports, business managers must also fulfill any org manager responsibilities assigned to them, e.g., reviewing the monthly reports for agency/orgs of their direct supervisor.

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Consulting Assistance

Upon request, Financial Services provides consulting assistance to business managers on the accounting data reflected in the monthly reports and on accounting techniques useful to business managers.

Procedure

1. Obtain the financial reports each month for the department, college, or vice presidential area.
2. Review the reports for any significant financial variations.

   Note:

   For Local Budgeted Fund Accounts, the reviewer may need to add back to the current fund balances the outstanding encumbrances. Personal services are encumbered at the beginning of the fiscal year for the entire year’s salary and deducted from fund balances at that time; these encumbrances cause many local agency/orgs to have deficit fund balances after encumbrances, but still positive fund balances before encumbrances.

   For the business manager, determining what a significant financial variation is or what is expected of him or her is a judgment decision. Examples of financial variations are described below.

   Significant Financial Variation

   Example:

   The College of Veterinary Medicine Local Budgeted Funds have a positive year-end budgeted fund balance of $250,000, yet the monthly report shows a current deficit fund balance, after add back of outstanding encumbrances, of $150,000.

   For this example, the business manager needs to investigate why the actual financial results are significantly different from the budget.

   Insignificant Financial Variation

   Example:

   The College of Veterinary Medicine has a positive year-end budgeted fund balance of $250,000 and the monthly report shows a current positive fund balance, after add back of outstanding encumbrances, of $175,000.

   Under most circumstances, this type of financial variation would not cause concern. Even though the actual fund balance is less than budgeted, the actual financial results may not be beyond what can be expected, and the present shortfall could simply be the result of timing differences during the year.

3. Discuss any significant financial variation with the appropriate org manager or business manager. If the variation is adequately explained, no further reviews or investigations should be necessary. The need for any further reviews and/or investigations will depend upon the answers received and the likelihood that the answers obtained adequately explain the variance.
4. Inform the business manager’s supervisor of any significant financial variation that cannot be adequately and appropriately explained and contact Financial Services or the Office for Research and Sponsored Projects Administration to discuss further reviews and/or investigations.

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