Overview: Manually Forecasting Future Expenditures and Available Balances without CMS

If you or your team are not ready to transition to using the Commitment Management System (CMS) for managing available fund balances and forecasting future expenditures, reference the process below.

Stanford's stewardship responsibility demands that we prudently manage expenditures charged to funds to:

  • ensure they meet the fund's restrictions, and
  • ensure that we accomplish the goals contemplated when the budget was set (whether or not we are using sponsored funds).

Learn how to: 
Forecast future expenditures while considering commitments, in order to determine if funding will last through the project period (or fiscal year). This becomes more important the closer one gets to the end of the project period or fiscal year.

For:  Managers of sponsored and non-sponsored project funds not using CMS

 


Review Actual Expenditures


Review actual expenses using Oracle Business Intelligence (OBI) Consolidated Expenditure Reporting (CER) summary and detailed level dashboard reports.

Identify needed corrections and make a note of the effect. Follow up as needed to correct errors.


Review Commitment Data


See Overview: Commitment Data on Oracle Financials Reports to understand:

    • Commitment types and their descriptions
    • Kinds of transactions for which commitment data is NOT included on Oracle Financials reports
    • Which Oracle Financials reports include commitment data
    • What report search criteria (dates/periods) to use to see commitment data on reports

Use OBI CER dashboard reports to review summary and detailed commitment data in a single interface.

Identify needed corrections (if any). Make note of the effect and follow-up to correct errors.

Suppress lingering purchasing commitments that you do not expect to result in an actual cost. See How To: View or Suppress Commitments on an Approved Purchase Order.

Consider commitments that will not become actual costs in the projected period (for example, a purchase order related to a monthly payment that goes out beyond the fiscal year).

Consider associated burden rates that should be applied to the estimated future costs (e.g. fringe benefits, indirect costs, etc.).


Estimate Future Activity & Other Costs


Consider un-posted transactions (not yet recorded as actuals) that do not create commitments (e.g. iJournals, Expense Requests, PCard, Feeder Journals) and estimate costs.

Consider other commitment data not available on Oracle Financials reports (e.g. hourly wage payments, future planned vacation credits, additional recurring pay, etc.) and estimate effect.

Consider other future planned activities (e.g. future hires, future salary increases, purchases that have not been initiated, future travel, etc.) and estimate costs.

Consider associated burden rates that should be applied to estimated future costs (e.g. fringe benefits, indirect costs, etc.).


Understand Remaining Balance Calculation


Review budget amount, actual expenditures, commitments, and remaining balance calculation on OBI CER Expenditure Balance reports. Field descriptions are as follows:

Field Description
Column Heading Description
Budget Amount (A) The amount entered in the University Budget Management tool as of September 1, adjusted for any iBudget entries, or the sponsored or capital budget, as appropriate.
(GL Period) Actual Expenditure Amount (B) Actual expenditures to date (based on the beginning and ending periods requested, usually project-to-date or fiscal-year-to-date).
Expenditure Commitment Amount (C) Expected costs associated with future transactions recorded by the Oracle Financials system.
Projected Remaining Balance Amount (A-B-C) The amount budgeted less expenditures to date and outstanding commitments.

Note -  The values for expenditures, budget, and commitments that appear on Oracle Financials reports is based on the prompts (e.g. fiscal year-to-date, period-to-date, or date range) and the Award type entered. For a detailed explanation, see Resources & Job Aids: Understanding How Expenditure, Budget & Commitment Data Appear on Oracle Financials Reports.


Forecast Projected Remaining Balance


Use Excel or other means to adjust Projected Remaining Balance Calculation (Budget Amount – GL Period) Actual Expenditure Amount – Expenditure Commitment Amount) by the effect of all expected future transactions estimated above.

Determine needed actions. Adjust plans based on calculated remaining balance (e.g. seek alternate funding, etc.).

Note – The Commitment Management System (CMS) enables online access to all types of commitment data and provides an interface for users to forecast future expenditures and remaining balances. For complete details, visit Stanford's CMS web site.
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