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Category Finance
Type Policy
Approved by University Council
Date Policy Took Effect 1 January 1995
Last approved revision 25 November 2022
Sponsor Chief Financial Officer
Responsible officer Financial Controller

Purpose

To provide a framework for monitoring, reporting and controlling financial performance and incentives for good financial management and penalties for inadequate financial management.

Organisational scope

This policy pertains to delegated managers of all reporting units as well as the support staff who assist these delegated managers with the financial monitoring and reporting of their units.

Definitions

Cost Centres
Approved departments within the University.
Activity Centre
A unit of the department which performs a specific activity.

Content

1. Reporting

  1. All financial performance will be measured against the budget.
  2. Divisions will monitor the financial results of their cost centres monthly and will take corrective action where necessary. In turn, each cost centre will monitor the performance of their activity centres. Financial reports will be provided for this purpose.
  3. Financial Services Division staff prepare monthly cost centre reports which are reviewed with the cost centre managers.
  4. The Chief Financial Officer will provide a monthly report to the Vice Chancellor and to Finance & Budget Committee and Council.

2. Carry Forward – Variances from Budget and/or Actual Surpluses/Deficits

  1. As a means of providing an incentive for good financial management, certain activity centres within academic cost centres will carry forward, from one year to the next, any variances from budget or actual surpluses/deficits, depending on the nature of the activity. Activity centres within non-academic cost centres will not carry forward budget variances unless specifically approved by the Vice-Chancellor.

The following rules will apply to Activity Centres:

  1. D, K, M, N Activity Centres and S projects (Internal Commercial; and Cost Centre Funded Research)
  2. The difference between actual operating surplus/deficit (excluding depreciation) and budget at year end will carry forward. A separate capital carry forward is calculate taking into account depreciation as well as capital additions and disposals.
R projects in Departments (Research Committee Grants)
  1. Actual surpluses and deficits at year end will carry forward. Depreciation is excluded and capital expenditure is included.
  2. All carry forward balances on projects with a one year timeframe will be removed at 31 March each year unless the researcher receives approval from the Research Committee for an extension of time. Carry forward balances on projects with a timeframe greater than one year will be carried forward until the project due date expires, at which time the carry forward balance will be removed.
E Activity Centres (External Commercial Activities)
  1. Actual surpluses and deficits at year end will carry forward. Depreciation is excluded and capital expenditure is included.
P Projects (Externally Funded Research – Reciprocal)
  1. Actual surpluses and deficits at year end will carry forward as a liability called Research Funding Received in Advance. This recognises that there is a future commitment for research. Unfunded depreciation is excluded and capital expenditure is included.
Q Projects (Externally Funded Research – Non-Reciprocal)
  1. Actual surpluses and deficits at year end will carry forward. Unfunded depreciation is excluded and capital expenditure is included.
T Activity Centres (Trust Funds)
  1. Actual surpluses and deficits at year end will carry forward.

3. Carry Forward Balances

  • Divisions are required to ensure that there is proper monitoring and control of carry forward balances.
  • Please refer to the Carry Forward Balances Policy.

Related policies, procedures and forms

Contact for further information

For further information, contact:

Financial Accountant
Email financial.accountant@otago.ac.nz

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