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The University of Oregon, along with all institutions in the Oregon University System and other state agencies, is required to bank with the State Treasury. In fact we have 27 University bank accounts at the State Treasury that must be monitored to ensure the University can meet all of its financial obligations.
http://baowww/wwwoab/FinMgt/UOBankAccounts.htm
Most activity occurs in what we call the B1 bank. This "bank account" includes cash from both our current unrestricted funds (including general funds, budgeted funds, designated operating funds, and service departments) and restricted funds (such as Federal grants). Basically all cash resides in this bank account unless there is a specific reason for it to be in another account. For example, separate bank accounts are established for the fee related portion of student centered activities and separate bank accounts are required to be set up for bond proceeds received by the institution.
At the institution level there are several ways we have to look at cash.
Cash by individual fund - which departments can determine by reviewing Banner balances. Those cash balances roll up in two main ways.
Overall institutional cash - which is the collection of all individual funds. This is what we look at to determine the overall health of our organization
Cash by Bank - which can be thought of like personal bank accounts that must be managed to avoid overdrafts. This is what we look at to ensure that we have the ability to meet our financial obligations. Institutional cash may be positive, but if the bank we are writing the checks against is negative we will have a problem.
The Business Office, working closely with ORM and others in the institution, projects cash balances at critical points in time to ensure the institution will be able to meets its financial obligations. Since most activity occurs in the B1 bank, which includes cash from both our current unrestricted funds (including general funds, budgeted funds, designated operating funds, and service departments) and restricted funds (such as Federal grants), that is where we focus our efforts.
Methodologies & Assumptions
The following describes the underlying methodologies and assumptions used in projecting B1 bank balances.
Methodologies
A. Creation of baseline projection
1. Calculate baseline revenue and expenditure projections
Use formula to project current year revenues and expenditures. The formula is applied to major fund types as follows: Previous year actual period to date data as a percentage of the previous year-end data applied to current year actual period to date data.
2. Calculate baseline accruals projections
Not all current year revenues and expenditures directly effect cash in the current year. For example, we will not actually collect all tuition revenues assessed in the current year before June 30, 2003. In addition, we will collect the cash on some tuition revenues assessed in previous years. Therefore, we used a similar formula as above to project year-end accruals and adjust current year projections of revenue and expenditures for their expected impact on cash.
B. Adjust baseline projection for known circumstances that affect cash, but would not be taken into account in using the formula.
Assumption
Except for adjustments made for changes in circumstances, current year activities will follow a similar pattern to the previous year.
This Business Office along with institutional management is responsible for identifying potential strategies and implementing appropriate strategies to respond to cash flow problems that arise. Some of those strategies may directly impact departments. Strategies for short-term cash shortage include, but are not limited to the following:
What are UO departments responsibilities related to cash management?
Manage
cash in your area of responsibility.
The business model at the UO is one where
authority to expend monies rests with the departments, schools and colleges.
Expenditure decision, made primarily by departments, schools and colleges
directly impact cash flow and in turn the institution's ability to manage cash
within it's bank accounts. Along with authority to commit the institution to
spend cash, comes the responsibility to monitor and manage cash flow within a
unit's area of responsibility.
Take
care in providing budgetary approval.
Budgetary approval is primarily the
responsibility of Unit Administrators and their designee's. Remember that in
providing budgetary approval for expenditures you are indicating not only that
sufficient funds are available, but the proposed expenditure is a priority
relative to other expenditures that need to be made. It is not enough to merely
have available funding, especially when resources are scarce, as they often are.
These means asking questions like,
1. Are there sufficient funds to make this expenditure?
2. Is timely and accurate financial information available?
3. Are there future financial uncertainties that might impact this decision? If so, can the decision be delayed?
4. What is the relative importance of this expenditure?
5. Can the university or department mission and objectives be met if the expenditure is not made?
6. Will this expenditure have to be made to the detriment of other planned expenditures?
Notify Business Office of significant changes in
historical patterns.
Business Office staff needs to know when there
are significant events or changes that may impact cash projections based on
historical trends. How do units know when to notify the Business Office? You
should contact Brett Giles at 6-1114 if you answer yes to any of the following
questions.
Questions: