- Enhanced identification and understanding of the prioritization of initiatives that advance the university’s vision and mission.
- Alignment of strategic and capital plans with budget.
- Greater understanding of all sources of revenue that support unit budgets.
- Transparency into the distribution of institutional resources.
- All material revenues and expenditures are planned and budgeted.
IU’s current budget model focuses on the general fund, with inconsistent and sporadic budgeting in other funds. This general fund budget focus does not account for significant revenue streams and spending. In addition, a single fund view is distorted by intra-university transfers. General fund budgets and actual balances are impacted by transfers into and out of other funds – the other side of these transfers is lost in a single fund focus.
Fund balance (net position) is the residual equity measure used to track changes in financial activity and total size of a unit. IU’s financial system is structured to allow measurement and identification of fund balance from the account (lowest level of aggregation), department, responsibility center, and campus to the consolidated university level. Fund balance is impacted by inter-fund transfer activity and so showing only one fund is distorting and misleading.
Phase I of All Funds Budgeting was fully implemented in late April 2016, in preparation for Fiscal Year 2017. It consisted of four primary initiatives:
- Develop a consolidated view of all funds.
- Align budgeted funds with actual.
- Align budget with capital plan/spending.
- Develop reporting enhancements.
IU’s all funds budgeting model will be implemented in a phased approach over three to five years. Budget business practices will be modified and enhanced in order to meet the all funds objectives. Implications of moving to the future state include:
- Use of consistent budgeting practices and guidelines for all operating fund groups across the university system.
- Consolidated view of budgeted revenues and expenses across fund groups at the responsibility center, campus and university level.
- Meaningful budget-to-actual variance analyses.
Following the FY2017 budget construction season, the University Budget Office conducted an analysis and began prioritizing and planning for Phase II. We expect that All Funds Budgeting will be fully implemented within 3-5 years.