Getting Started with the Consolidated Operating Budget
The Board of Trustees of the University require that senior management:
- Submit the proposed operating budget for the coming academic year for approval at the Trustees' annual meeting in June.
- Report updates on the actual operating results against budget at regularly scheduled meetings during the year.
This proposed operating budget with updates is combined into the Consolidated Operating Budget (COB) and presented to the Trustees for their approval.
COB reports are used to compare budget, current estimate, and actuals. The reports pull information specific to Operating Funds only.
This schedule includes all activities that affect the sector’s “change in net assets to support current operations.” This result corresponds to the current portion of the change in net assets as reported in the audited financial statements for the University as a whole.
The scope of “current operations” is determined by the same accounting principles that guide the assembly of the audited financial statements, and include only those transactions that related to the current fiscal year. For this operating budget presentation, “net assets” include all funds except for endowment principal, plant, property and equipment, and student loan funds.
Net assets to support current operations are affected by three types of activity:
- Direct revenues and expenses include receipts from and payments to entities outside the University, including tuition revenues, employee compensation, and debt service. Equipment purchases are reflected in the direct activity section of the operating budget. In previous years, the offsetting sources of funds appeared as direct operating revenues, but equipment purchases were recorded as a non-operating transfer.
- Indirect sources and uses include internal allocations of revenue and cost between sectors of the University. For instance, the General University budget receives overhead contributions from each of the two academic sectors for central services. These internal transfers appear as sources in the General University budget sector and uses of funds in the academic budgets, and must be reflected to accurately project ending fund position and fiscal balance within each budget sector. (This is similar to inter-company activity in a commercial income statement.) Indirect activity is eliminated in the grand total University operating budget.
- Non-operating activities include transfers of operating funds to and from three classes of long-term assets: endowment, property and plant and student loan funds.
The net of all three of these categories of activities results in a change in current assets.
Although the use of some of these balances—especially gift and endowment income accounts—are restricted by purpose, all are available for spending on a current basis within the annual operating budget. By contrast, only the income from endowment assets is normally available for use in the operating budget, and plant assets are not directly convertible for spending.
Advances for grants and contracts and balances due from their sponsoring agencies are never included in net assets, as this revenue is recorded only as expense is incurred.
- Annual Operating Budget Policy
- Capital Project Approval Policy
- Decapitalizing Endowment Accounts
- Management and Budget Records Retention Policy
- Operating Overdraft Policy
- Budget Process at Columbia (instructor-led)
- Budget Tool Basics (web-based)
- Running COB Analytics using Web Intelligence (Webi) (job aid)