APLICACIÓN DEL BALANCED SCORECARD EN FACTORING BANCOLOMBIA

Have the A&M System Internal Auditor undertake a comprehensive audit review of the Cash Concentration Pool.

The National Association of College and University Officers (NACUBO) recommends that any investment pools managed by university entities be audited on a regular basis.

FISCAL IMPACT

This recommendation can be implemented within existing resources, and could result in a potential increased return on the pool’s assets.

D. BUDGETING AND PLANNING

The internal budgeting process at A&M is centrally directed but decentrally implemented. For the budget preparation process, academic and non-academic units prepare their budgets based primarily on a carry forward basis, meaning the ensuing budget will be based on the previous budget period with possible minor additions or deductions and reflecting projected revenues. Additions or

deductions to the budget are negotiated with deans and possibly the provost (vice presidents for non- academic units) before the budgets are built. Funds for salary increases are distributed to units in Phase 1 of the budget process and are reallocated in Phase 2 by unit heads.

Specific decision packages initiating at the unit level do not appear to be part of the budget building process, mostly due to the lack of new funds coming into the institution. Due to the current funding situation, decision packages, if used as part of the budget process, would need to be funded with revenues redirected from other units.

For academic year 2004–05, A&M increased undergraduate, in-state tuition and mandatory fees by $913 per student, and undergraduate out-of-state tuition and mandatory fees by $1,573 per student. A&M projects that this tuition increase will raise $29.3 million in additional revenues, which will be used for the purposes shown in Exhibit 4–21.

Exhibit 4–21

Uses of Additional 2004–05 Tuition Revenue

Use of Revenues Amount

State Minimum Tuition – Merit raises $1,500,000

Designated Tuition 8,300,000

Faculty Reinvestment - New Faculty 3,100,000

Faculty Reinvestment – Faculty Retention 1,800,000

Student Financial Aid 9,600,000

Computer Access Fee – Systems and Labs 3,700,000

Bus Replacement Plan, etc. 1,000,000

Student Services Initiatives 300,000

Total Projected New Revenues $29,300,000

Source: A&M, 2004.

The university has many available fund sources. The fund sources can be categorized into Education and General (E&G) revenues, e.g., state appropriations, tuition, and indirect cost revenue, and special revenues, which include dedicated, restricted, and local funds. Included in the special revenue

category are service fees such as library fees and special program fees. In building their E&G budgets, the academic and non-academic units receive revenue forecasts from the university Budget Office. In the second year of the biennium, these revenue forecasts resemble levels from the prior budget period. In some cases, such as state mandated budget cuts or internal re-appropriation of funds, the revenue available for units may not resemble the previous budget period.

Once the funds have been allotted to the academic and non-academic units, there does not appear to be any formal procedure for reporting actual expenditures. Because of the centrally directed yet decentralized implementation process for the budget, the central university Budget Office does not have the resources for a large staff. Similar large research institutions with a comparable type of budget process have similarly sized budget offices, usually ranging from 6 to 10 staff members. The decentralized implementation process creates a need for budget staff. In many cases at A&M, the college staff with budget responsibility is assistant deans. These assistant deans work closely with the central Budget Office so that duplication of effort is kept to a minimum, while the consistency of information is maintained.

Gradual growth in enrollment has increased tuition revenues. In recent years, funding constrictions by the state and internal redistributions of funds have altered the funding levels of the units. Although there is increasing enrollment pressure on A&M, the university does not plan on significantly

increasing enrollment. Because the funding formula is enrollment driven, the university anticipates its state funding to remain relatively constant. Additional state funding could be available if the funding rate per student increases. However, in the near term, the funding rate per student is anticipated to remain fairly constant. Increases in designated tuition and/or special program fees are options for increased revenue; however, significant tuition increases in designated tuition are likely to occur if state appropriations do not increase. Facilities and Administrative or Indirect Cost Recovery (F&A) funds provide another potential source of increased funding if the university’s research grant dollars increase. The funding situation for A&M is not expected to radically change in the near future. New university initiatives, such as the faculty reinvestment program, were initially supported by internal reallocation of $20 million. However, future support for new initiatives must be funded from new revenues.

FINDING 4-7

The process of creating individual budget packets for each department is a manual process. The budget system (BPP) used by the university is at a fund level by account. Therefore, the Budget Office of the Division of Finance must manually produce reports that indicate the complete budget for each academic and non-academic department. These reports do not come out the accounting system, FAMIS, which is an old system that is reported to have many problems. The A&M System uses FAMIS for its financial reporting; A&M uses FAMIS for financial accounting.