Closing The Budget Essay

690 Words2 Pages

Introduction
The author of this paper works for a for profit professional university. The university uses a typical fiscal year date of July to July. The budget cycle though is on going with continuous monitoring of the overall operational budget and unit budgets throughout the year. The process of building the next year’s budget starts in the spring with guidelines/perimeters given by the chief financial office. Proposed budgets are then submitted, reviewed, and adjusted to fit the universities forecasted revenue. The closing of the budgets is a curious time period where accounts can be frozen due to revenue shortcomings or units can be encouraged to make large expenditures do to surpluses. Most recently the institution has seen a deficient in the overall operational budget for the university due to declining revenue. A key problem with closing the budget during these years of revenue shortcomings …show more content…

This practice allows for a freeze in spending, accounting for the loss in revenue. The result of this is non-essential items (i.e. new technology, travel, company meals, extra) are not purchased. At the university in question there is a habit of budget managers disregarding requests to slow expenditures, thus not reduce spending at the level set by the finance department. Therefore the practice of closing the budget forces a stop of non-essential expenditures. The problem comes with providing continues programing to our students. When it comes to student activities these expenditures are not essential to the function of the university, but are important to the well being of the students. As an institution that is solely dependent on the revenue generated from student tuition, student satisfaction is a priority. When annual student events or activities can’t happen because of a budget closing early this has a negative effect on student

More about Closing The Budget Essay

Open Document