|I. Legislative Budget
The College prepares a legislative budget request (currently on
a biennial basis) as a plan of operation for the legislative funding
period. This biennial budget request is the formal College financial
document and plan which, after approval by the State Board of
Trustees, is presented to the Commission for Higher Education,
the State Budget Agency, and ultimately to the Indiana General
Assembly. The end result of this request is the authorized budget
legislation approved by the Indiana General Assembly. This legislation
becomes the basis for our internal budget process.
The biennial budget document(s) is entitled "Legislative Request
for Operating and Capital Funds." The College traditionally
prepares separate capital and operating budget documents. However,
the process for review and approval are similar.
The legislative budget document contains general narrative addressed
to the mission and goals of the College. A general history and
description of the College are included to assist readers in further
understanding the budget request.
The legislative request for capital funding needs addresses new
construction, land acquisition, facility repair and rehabilitation,
and major equipment acquisition. An introductory summary statement
provides information concerning each capital request which is
prioritized according to College-wide goals and needs. Data by
project is included with pertinent information concerning need,
relationship to long-range (ten year) facility plans, other capital
improvement projects, impact on space usage, expected contribution
to educational services, and cost computations.
The legislative request for operating funds addresses the expenditure
estimates by major object and functional categories along with
estimated sources of income supporting the educational services
of the College. Numerous schedules are prepared to provide expenditure
and revenue data by different functions and object categories.
The cost information study, financial report and current year
budget are used to prepare the requested schedules.
The biennial budget format is dictated by instructions from the
Indiana Commission for Higher Education. The format and presentation
of data may be expected to vary to comply with their instructions,
as well as to accommodate College management in formulating budget
documentation to best present the needs and objectives of the
||Annual Internal Budget
The College Internal Budget is prepared on an annual basis. The
Internal Budget is a planning document used to insure the optimum
allocation of College resources for instructional programs and
support services. The process reflects the consummated legislative
budget request in regard to state appropriations and legislative
intent relative to student fee increases and wage and salary adjustments.
Current budget development procedures utilize a modified base plus
concept. Non-recurring expenditure budget adjustments (prior year
carry forward, College-wide accounts, etc.) are excluded from
the base year. Increases are provided for added cost arising from
expansion, salaries and wages, employee benefits, utilities, leases,
and supplies and equipment. Increases are also provided for program
improvement or special areas of services which are consistent
with the overall College plan considering the established goals
The budget build up, as well as the final budget composite, provides
for expenditures by general object category. Current general expenditure
object categories include salaries/wages, staff benefits, general
supplies and expense, utilities, facility leases, and capital
Data are solicited from regional management on all relevant budget
matters. This includes concurrence with approved personnel staffing
schedules, fringe benefit programs, exchange of information concerning
changes in unavoidable expenses, as well as plans for plant expansion
and special program improvement needs. The data is reviewed to
assure compliance with established internal goals and external
legislative intent. The expenditure budget must not exceed the
established revenue budget which incorporates revenue from student
fees, state appropriations and miscellaneous sources. The appropriations
amount is the result of legislative action, while forecasted fees
are derived from prior year enrollment and the State Board of
Trustees approved fee schedules. After the annual budget document
is reviewed by College management, it is presented to the State
Board of Trustees for approval.
After final approval the budget detail by location is accumulated
by the regional business office and College Central Office staff
for input to the College accounting records system. The budget
detail for the new fiscal year is balanced/reconciled to the approved
total budget. The new budget detail is reflected in the reports
generated by the College accounting system for the month of July.
||Operational Fund Expenditure Budget -- General Instructions
- General Guidelines and Instructions
- Salaries and Wages -- The full-time salary budgets
must agree by positions classification with the Compensation
Analysis which lists individual positions by function
including name, job class number, title and salary.
The Compensation Analysis must be returned to the
Budget Department with the new salaries.
The Budget Department staff will update this analysis
and maintain it throughout the fiscal year. Any
position changes to this analysis, which agree
with the allocation table, must be processed by
utilizing the Position Request form (PRF) procedure.
Positions may be deleted in order to transfer
salaried fringe dollars to the supplies and expense
budget by processing a PRF.
Non-instructional part-time salaries must be in
the original budget in the part-time salary category.
- Fringe Benefits -- The recommended budget for fringe
benefits must be utilized until a Position Request
form is submitted to delete, add, or restructure positions.
- Utilities, Facility Leases -- Utilities and facility
leases have been budgeted based upon actual expenditures
and the regional projections. The recommended budget
for these categories must be utilized. Adjustments
will be made to the budget during the fiscal year
and at year-end to match actual expenditures in these
- Supplies and Expense and Other Leases -- A minimum
recurring base level of expenditures must be determined
for these expenditure categories. A comparison should
be completed for actual expenditures for the past
several years and exclude any "one-time"
expenses. Do not under-budget recurring expenditure
needs in the Supplies and Expense and Other Leases
- Maintenance Level Budget -- If the budget allocation
does not meet the minimum level of operation as projected,
then it must be indicated on the General Operational
Fund Expenditure Budget form (Exhibit A) by showing
'Other' income to support the budget base. All regional
budget category amounts will be reviewed to assure
they have been prepared in accordance with the guidelines.
Meetings will be held by the Central Office and regional
staff during August to review any budget problems
and to prepare any required plan of action.
- Budget Adjustments -- All Budget Transfer Requests
(BTR's) completed by Central Office will be made to
specific accounts to assure budget integrity. The
regional reserve account by subcode will only be used
for enrollment adjustments and other adjustments not
specifically identified with a project. This procedure
will assure the budgetary funds are included in the
- Salaries and Wages
Position allocation/budgeting control provides the College
the ability to know, at any given time, the budgetary dollars
committed to personnel services for filled and vacant full-time
positions. Every full-time position is defined, approved and
budgetary dollars allocated.
The three salary categories used are exempt (salaried),
non-exempt (hourly), and instructional. Within these three
categories an employee can either be full-time or temporary/part-time.
For non-instructional areas, all exempt and non-exempt,
full-time employees' July 1 salary must be line-item
budgeted in the account that they are paid from. Exempt
and non-exempt, part-time temporary budgets may be entered
as a line item or as a pooled (Automatic Budget Reallocation)
Instructional full-time budgets (include summer appointments)
must be line-item budgeted in the account from which they
are paid. Part-time/temporary instructional budgets may
be pooled in instructional divisions. The original
part-time instructional budgets should be at least the
amount of the previous year, assuming a zero enrollment
growth factor, unless documentation is provided. Adjustments
may be made throughout the year for increases or decreases
in enrollment growth.
The following method is used to determine the salary budget:
- The Compensation Analysis is distributed by the Budget
Department. It is verified by the regional staff and
utilized to determine all approved, filled and vacant
- All positions not approved (allocation exceeded) are
not included in the base.
- Vacant or unfilled positions are budgeted based on
the maximum hire-in rate of the current salary range
for the job classification.
- Any nine-month instructional staff member who has
a summer extended contract is identified. The summer
appointment amount is to be included in the full-time
salary budget base.
- Any restricted or auxiliary dollars supporting the
salary and wages of approved positions should be deducted
from the salary and wage base for the operations fund.
The full-time position/budget control base should include
only the approved positions (filled and vacant) which
are funded by the operations fund. This base should be
the actual full-time salary and wage commitment of the
College operations fund.
The original established full-time salary and wage base
will change only as a result of an approved PRF being
processed during the year. When the PRF is approved, a
BTR will be processed by the Budgeting Department.
Any changes from the March 31 budget base must be explained
and documented. Every position included in the salary
budget data distributed with the budget allocation will
be reconciled. The above procedure should provide the
Region with more control over actual full-time salary
and wage commitments. The adjusted salary and wage budget
base should always approximate the actual salary and wage
- Fringe Benefits
The fringe benefits base is determined based on actual filled
positions and approved vacant positions. The recommended
budget should be the original budget unless there is documentation
indicating significant changes. If new positions are added
or deleted during the year, or if a position is reclassified
resulting in additional or decreased fringe benefits, a budget
adjustment to the fringe benefits' category must be completed.
This procedure is done as part of the PRF process. The fringe
benefit budget is adjusted to match expenditures at fiscal
- General Supplies and Expenses
Several categories within the supplies and expense object
category should be line-item budgeted. Following are the categories
which must be line-item budgeted.
||Maintenance and Repair
All other categories may be pooled at the departmental level
or line-item budgeted; the degree of budget detail is a regional
- Utilities and Facility Leases
Utility and facility lease expenses may either be line-item
budgeted, or a budget pool (Automatic Budget Reallocation)
may be used. The amount requested and approved in the recommended
budget buildup should be the amount utilized in the original
budget. The utility budget will be adjusted to match expenditures
at fiscal year end.
- Fee Remission
The budget allocation includes the fee remission-staff benefit
allocation for employee, employee/spouse, and dependents taking
courses at Ivy Tech. The budget amount for staff fee remission
should be included in the fringe benefit original budget base.
- Special Allocations
During the fiscal year, budgetary adjustments are completed
from College-wide budgetary accounts for special requests
and any other justified extraordinary expenses. When approval
is granted for an increase, a budget adjustment is processed
by the Budget Department after communication with the regional
business office regarding the use of proper accounts.
Several budgetary expenditure and revenue accounts are established
at the College-wide level and administered by Central Office staff.
These accounts may be established to serve all locations for the
- The expenditures are for the benefit of the College and
cannot be attributed to any specific location, i.e., insurance/risk
- There is no rational basis on which to establish original
budgets by specific location.
- The specific need for budgetary funds cannot be determined
at the time the original budget is established.
The following College-wide accounts are being utilized:
- Unemployment Compensation
Unemployment compensation expenditures are budgeted in a College-wide
reserve account. At the end of September, December, March,
and June an analysis is completed for actual expenditures
by location. Budget Transfer Requests are processed to move
budgetary funds from the College-wide reserve to the specific
locations in the amount of actual expenditures.
As of year-end closing, the expenditures for unemployment
compensation should equal the budget allocation.
- Indirect Cost Recovery
During the year, indirect cost recovery accounts may be established
in the operations fund for approved projects funded by outside
agencies and reported in the Sponsored Program area. No original
College-wide revenue budget is established for indirect cost
recovery. However, each calendar quarter, a BTR is processed
to increase the regional expenditure reserve account and the
appropriate indirect cost recovery revenue accounts.
All adjustments are based on the amount of actual collections
in the indirect cost recovery revenue accounts. At year-end
closing the revenue budget should equal the actual collections
in the indirect cost recovery accounts. Corresponding adjustments
will be made to the expenditure budget.
- Apprenticeship Support
At the beginning of each fiscal year a budgetary reserve is
established for College-wide apprenticeship support. An expenditure
account has been established at each location in the operations
fund with the title of "Instructional Staff - Support
Apprentice Programs." The Sponsored Program staff prepares
an analysis of apprenticeship expenditures. Appropriate charges
to the operations and apprenticeship fund is completed by
a journal voucher:
DR. Instructional Staff - Operations support of Apprentice
A budget transfer will be processed to move budgetary allocations
from the College-wide reserve to the regional expenditure
accounts. The amount of the BTR's for the operations fund
will match the accounting entry prepared by Sponsored
Each academic semester as of the official count date,
comparisons are made between the actual student fee assessments
and the current year budget. If the actual student fee
assessments (as adjusted by a collection factor) are either
over or under the current year budgets, a budget adjustment
T he following budgetary entries are made if the adjustment
DR. Regional Student Fee Revenue
CR. Regional Expenditure Reserve Account
If the budgetary adjustment is negative, the following
entries are processed:
DR. Regional Expenditure Reserve Accounts
CR. Regional Student Fee Revenue
An accounting entry to the expense allocation and estimated
revenue accounts must be processed to match the net change
reflected in the budget expense and revenue accounts.
If enrollment growth dollars are allocated to Ivy Tech
by the General Assembly as part of the legislative biennial
budget, they are included in a College-wide account for
enrollment growth. Distribution of the budgetary funds
is determined on the basis of actual student fee assessments.
- Plant Expansion
Plant expansion funds are requested from the State legislature
for operating costs associated with opening new facilities.
The operating costs may include utility expense, custodial/maintenance
services, and lease or rental agreements. The funds are granted
by specific facility and are included in the operating budget
but are determined in conjunction with the capital budget.
The amount of plant expansion funds granted by the General
Assembly is budgeted in a College-wide account. The funds
are initially allocated by facility or location, but budgetary
funds are transferred to the regional institutes only after
approval by Central Office staff. Only the actual amount necessary
to operate expanded facilities which are approved by Central
Office staff will be funded.
All insurance/risk programs other than employee fringe benefit
plans are coordinated and administered by Central Office staff.
Expenditures are not allocated to a specific location. All
payments are processed against the Central Office insurance
accounts for the College in total.
- Contingency Reserve
A College-wide contingency budgetary reserve is established
at the beginning of each fiscal year. The contingency budgetary
funds may be transferred to a location for an emergency or
specified need. The use of budgetary funds from the contingency
reserve must be approved by the President.
- Regional Reserves
College-wide regional reserves may be established for specified
purposes, i.e., to fund special request, quality improvement,
or program improvement. The funding of the regional reserves
is accomplished by reallocation of budgetary resources.
|IV. Budget Transfer
The Budget Transfer Request is used in adjusting, correcting, or
entering budgetary data at the beginning and during the fiscal
year. Expense budgetary funds are transferred from one account
to another by debiting the account which receives the funds and
crediting the account from which the funds are coming. The reverse
is true in revenue accounts.
The section of the Budget Transfer Request titled "Reason
for Transfer" must be completed for clarity, control and
future audit reference.
- Next Year's Original Budget
Next year's original budgets may be entered by the regional
business office staff utilizing the `Next Year (029)' feature
on Screen 010. This feature may be utilized until the new
year file is opened for use. The next year budget data will
automatically be transferred to the `original budget' in the
- Original Budget
Original budgets may be entered utilizing the `Original (020)'
feature on Screen 010 by the Central Office staff only. Regional
staff cannot utilize the original budget feature.
Transfers may be processed by appropriate staff at all locations
during the fiscal year for specified accounts. Transfers may
be completed by utilizing the `transfer (022)' feature on
Salary and fringe benefits related to a deletion, addition,
or restructure of a full-time position must be processed on
a BTR through the Central Office Budgeting Department. A PRF
will not be processed for a position unless a completed BTR
Utilities and facility lease budgetary accounts cannot be
changed unless approved by the Central Office staff. All utility
and facility lease BTR's will be initiated by Central Office
budgeting staff if they are part of plant improvement or expansion.
Revenue budgets may only be entered by the Central Office
budgeting staff since it has the effect of increasing the
overall College budget.
|V. Pooled Budget
Pooled accounts allow for budgetary funds to be established in
one account from which many expenditure accounts may then draw
against this account. When an expenditure occurs, the budgetary
dollars will automatically draw down from the pooled account to
cover the charge.
No expenditures should be processed against any pooled budget account.
|VI. Position Budgeting
Every full-time classified position is approved by the Executive
Vice President for Regional Operations. With the approval
of the position, budgeting dollars are committed to the funding
of the salary and accompanying staff benefits. Position budgeting
provides the College the ability to know at any given time
the budgeting dollars committed to personnel services for
filled and vacant positions. Each location's position control
list will reflect the existence of all approved positions.
- All restructuring or changes to existing full-time
positions, or new full-time positions must be submitted
on a PRF, which must be accompanied by a Budget Transfer
Request form (M-36). When final approval has been
completed, position allocations will be updated and
the budget transfer will be processed by the Budget
Department. The Region will be notified by Employee
Relations of approval. New employees may be entered
on the payroll system only after final approval of
the new or restructured positions.
- All requests for new positions or restructuring of
existing positions funded by sponsored or restricted
funds must also be processed on a PRF.
- Part-Time/Temporary positions will not require a PRF.
These types of positions have an allocation of 99.0.
A Region may have as many part-time/temporary positions
as needed as long as regional budgetary resources
- When a full-time position is to be eliminated, the
first page of a PRF, the Verification of Available
Funds form and a BTR must be processed. Such notification
will allow for updating the position control list.
Any long-term vacant position should be deleted from
the position control list and budgetary funds should
- At the end of each month, a position control listing
and full-time employee report is produced and distributed
to each Executive Director of Finance, Director of
Regional Employee Relations and appropriate Central
Office staff for reconciliation.
Cross reference: COPM 14.22 Personnel Procedures
end of Section B