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Figure 8: Comparison of Actual Receipts and Disbursements Based on New and Historical Reporting
| FY19: | | FY20: | | FY21: | |
|---|
| RECEIPTS: | | RECEIPTS: | | RECEIPTS: | |
|---|
| Actual per APA Request | 38,816,491.63 | Actual per APA Request | 44,039,610.51 | Actual per APA Request | 48,718,724.06 |
|---|
| Actual Per Board Packets | 44,403,894.89 | Actual Per Board Packets | 46,714,304.00 | Actual Per Board Packets | 49,231,525.00 |
|---|
| Difference | (5,587,403.26) | Difference | (2,674,693.49) | Difference | (512,800.94) |
|---|
| DISBURSEMENTS: | | DISBURSEMENTS: | | DISBURSEMENTS: | |
|---|
| Actual per APA Request | 43,121,376.15 | Actual per APA Request | 45,213,514.24 | Actual per APA Request | 60,331,730.28 |
|---|
| Actual Per Board Packets | 58,761,571.00 | Actual Per Board Packets | 46,296,276.00 | Actual Per Board Packets | 50,664,098.00 |
|---|
| Difference | (15,640,194.85) | Difference | (1,082,761.76) | Difference | 9,667,632.28 |
|---|
The budgeting office and the accounting office did not work together to develop budget to actual reports that reflected actual revenues and expenditures from the accounting system that could be used to develop the next budget. As a result, the budget forecast would not be based on actual prior year revenues. For example, in 2019, the University had revenues of $44.4M, when $46.9M had been budgeted. For the 2020
budget, instead of developing the next year's budget with a reasonable increase or even steady revenue amount, the budget was increased to $48.6M. Entering this budget into the accounting system gave various departments an unrealistic estimate of the amount they could spend during the school year.
Budget forecast was not based on actual prior year revenues.
The budgeting office and the accounting office did not work together to develop budget to actual reports that reflected actual revenues and expenditures from the accounting system that could be used to develop the next budget. As a result, the budget forecast would not be based on actual prior year revenues. For example, in 2019, the University had revenues of $44.4M, when $46.9M had been budgeted. For the 2020
According to interviews, the Board had no role in developing the budget and there were no budget workshops held to educate board members. Furthermore, there was no evidence the Board questioned the budget as presented to them or requested adjustment to the budget before approving it. Because information provided to the APA was inconsistent and requested reports contained varying totals for revenues and expenditures, we could not determine whether the Board was provided accurate information in budget to actual reports.
During the fourth quarter of 2019, expenditures increased from a year-to-date total of $35,803,618 as of March 31, 2019, to $58,761,571, an increase of $22,957,953, evidencing significant spending in the last quarter of FY 2019. On September 5, 2019, the fourth quarter budget was presented to the Board. The Board was informed that the University incurred several unbudgeted expenses during FY 2019. No detail was given as to what those expenses were and there was no documented discussion regarding the issue.
A sound budgeting process requires well-defined written policies and procedures to establish goals and objectives, set priorities, and allocate resources. Budgeting for a college or university allows a board to align resources with priorities and informs the board of the full scope of the entity's revenue and spending. This enables the board to responsibly allocate funds to match appropriate expenses based on anticipated revenues for the upcoming year.