Financial Administration

Purpose

Financial planning, budgeting and administration are means to ensure the proper record of all transactions executed by the University’s officers and to guarantee that the access to financial documents and records is available to authorized individuals. The University’s financial systems and accounting mechanisms provide control of fiscal activity in light of established plans, budgets, and other expenditure authority.

Financial Planning

Following the University’s Strategic Plan guidelines, financial planning shall align projected funding and staffing requirements with resource allocation to instructional, research, public services, academic and institutional support services, and administrative priorities. It should include both Capital Projects and annual Operating Budget forecasts.
The VP and CFO shall coordinate and oversee the development of multi-year funding projections and Annual Financial Plans which reflect balanced budgets within defined time periods.

Budgeting and Monitoring

To ensure that resources are allocated and spent in accordance to the University’s priorities, revenues and expenses must be budgeted in a comprehensive manner, including the forecast and management of possible changes in budgetary expectation.

The budget process serves as the primary planning and control tool to link the University’s various programs to the financial resources needed for their accomplishment. Budgets shall be finalized and entered into the University’s financial system before each fiscal year begins and they must include both operating and capital components (which must be aligned in order to reflect the effects of capital activity on the operating budget).

The Board of Regents or their delegate, the Executive Committee of the Board of Regents, should approve the budget request prior to formal discussions/ negotiations with external funding agencies.
Each Director/ Dean has the responsibility to prepare budget proposals for submission as part of the annual budget development process. This requires the understanding of the major budget components by the head of the Academic and Research departments/center. Responsibilities for budget details are usually delegated to faculty and staff who have operational decision-making authority. Departments, Colleges and Research Centers are responsible for accurately budgeting revenues and expenses for all of their activity groups.

Under the direction of the VP for Administration and CFO, the Finance Director (and his/ her delegate, the University Budget Officer) shall suggest the budget proposal’s format and structure and assist Vice Presidents, Deans and Department Heads in the construction of their respective plans. He/she may also provide financial planning tools to facilitate the creation of specific proposals, as well as to assist the entire process of financial planning, monitoring, and reporting.

Planning and Budgeting Framework

The Planning & Budgeting Framework at Qatar University includes the following components:

• Reaffirmation or revision of Strategic Plan goals and objectives;
• Development of  preliminary Operating and Capital budget plans;
• Discussions within the University regarding preliminary proposals;
• Preparation of final Operating and Capital budget requests;
• Submission of budget request proposals to the Board of Regents for review and approval and subsequently to the Ministry of Finance of the State of Qatar;
• Upon receipt of appropriations from the Ministry of Finance, the implementation of a resource allocation process, effective April 1st of each year; and
• Budget management throughout the fiscal year.

Operating Budget Chapters

Qatar University’s annual operating budget consists of four chapters:

The University is not permitted to transfer funds between Chapters, but may transfer within Chapters.

Multi-year Calendar and Plans (PDF)

A three-year schedule of events and actions necessary to reengineer the Budget Processes in order to align it with the Strategic Plan has been developed and recommended to the University leadership.

Chart of Accounts and Aggregate Objects of expense

As of April 1, 2012, a new chart of accounts will be installed on the main administrative computing system, as well as new and comprehensive list of objects of expense. During FY2011-12, a special ‘mapping’ procedure will allow this data to be collected and reported.

Strategic Plan’s Review and Update

Qatar University’s leadership will review the Strategic Plan’s goals, objectives, and key performance areas (KPAs) on a scheduled basis and will modify or reaffirm these as appropriate. Vice Presidents, Deans and Department Heads must also review, reaffirm or modify their unit’s objectives (specific and quantified) and Key Performance Indicators, as well as formulate action plans for the future budget year.

Budget Team/ Executive Management Committee (EMC)

The President should select within the members of the Executive Management Committee and within the University community, individuals to serve on the Budget Team for a period of three years. He/She should also appoint a chair of the Budget Team.

The Budget Team reviews preliminary budget proposals and resource allocation plans in light of the Strategic Plan (its goals, objectives and key performance measurements).

Selected members of the Finance Department and Office of Institutional Research will staff the Budget Team meetings. The Budget Team/EMC also provides advice to the President.

Setting University-wide Funding Priorities

Each year, in early spring, the Budget Team/EMC assesses if the University’s funding objectives and priorities for the respective year are linked to the strategic goals of the University. These priorities are then reviewed by the President and shared with the University community.

New Programs

Requests for new University programs will be subject to the University’s policies and procedures for new programs approval.
When seeking approval of funds for new programs, the Dean/Director shall provide the following information:

• General description of the program (objectives, structure, etc)
• Explanation and justification defending the approval of the new program considering the University’s strategic goals and the current internal and external environment
• Projected revenues and expenses for the following three to five years
• Estimated enrollment by year (when applicable)
• Identification of start-up costs and any relevant one-time expenses
• Explanation of the assumptions used in the preparation of the proposal
• Exit strategy in the event that the proposed program fails to meet established targets

(This guideline is related to the financial requirements of new programs. It assumes that all necessary reviews have been conducted by the respective officers in the case of academic programs)

Performance/Incentive Funds

Future Budget development and proposals may include a component for performance or incentive funding granted upon the achievement of key performance indicators (KPIs).

The Budget Team shall consider this funding element when elaborating the annual budget proposal and resource allocation. By using measurable outcome and indicator, the incentive funds may be applied to reward innovation, reforms, and cost-effective and cost-reducing programs. Benchmarks may be developed to be used to measure performance related to student success, program quality, learning outcomes, and enrollment goals.

Based on international experience, a set of principles and guidelines should be presented and agreed upon in framing the measurements and indicators used for performance funding allocations. The measurements used and agreed upon should be: relevant, relatively simple to understand, consistently applied, statistically sound, and derived from objective data sources. The administrative cost to collect the data should not be excessive and the results should help frame future policies and practices.

It is often recommended that the initial allocations for this purpose be a very modest percentage of the total fund available.

Operating Budget Preparation

The Operating Budget is prepared annually. It is based on the University’s objectives and priorities for the new budget year, as proposed by the Budget Team/EMC and approved by the President. The VPCFO transmits budget guidelines, forms and instructions to each budget unit. Academic budget proposals are developed by faculty, program directors, departmental chairs and Deans and then reviewed by the Vice President and Chief Academic Officer. As of the Fiscal Year (FY) 2012 and thereafter, budget plans and resource allocations shall be linked to the updated strategic plan.

Capital Budget Preparation

A separate Capital Budget is also prepared annually. It identifies the major and minor projects (considered to have high priority for development) and plant renewal/repair requirements for that year. This capital budget request is reviewed by the Budget Team/EMC. It is then presented to and discussed with the President who, subsequently, makes its recommendation to the Board of Regents.

Budget Meetings

Budget meetings with each Vice President, Dean and Administrative Director are conducted by the President and his/her senior staff. Its objective is to explain a preliminary budget proposal, as well as to show present recommendations for an approved final budget request to the Board of Regents.

Resource Allocation

After the notification by the Ministry of Finance of the approval of the new fiscal year Operating and Capital budget appropriations, the VPCFO will brief the President regarding the authorized numbers of positions and the amount of funds available.

The VPCFO will submit a detailed resource allocation plan by aggregate object of expense, including his/her suggestions to the Budget Team for review and recommendation to the President.

Upon Presidential approval of the resource allocation plans, the VPCFO will notify Vice Presidents, Deans and Directors of the assigned amounts for Chapters 2 and 3 and the numbers of authorized positions available to each budget unit.

Budget Management and Accountability

Vice Presidents, Deans and Administrative Directors are accountable for their respective budget unit’s financial status.

After resource allocations are approved and distributed, the Finance Department will meet with Vice Presidents, Deans, and Directors to establish forecasts for Chapters 2 & 3, estimating quarterly expenses for each Division, College and Administrative Department. At the end of each quarter, actual expenses will be measured against forecasted amounts.

Variance Analysis

A summary of actual variances from the budget forecasts is prepared and analyzed on a regular basis. Results of this analysis are distributed to the President, Vice Presidents, Deans, Administrative Directors, and other appropriate managers.

The objective of this analysis is to help these individuals operate within their approved budgets. In addition, it also allows the mitigation of budgetary problems as it provides an early warning and permits corrective actions to be taken in a timely manner.

Transfer of Funds during the Fiscal Year

Transfers of funds between Colleges/Academic Programs are approved by the Vice President and Chief Academic Officer.

Transfers of funds between Administrative Units are approved by the Vice President and Chief Financial Officer.

Transfers between Vice Presidential areas are approved by the President.

Budget Adjustments

There are two types of budget adjustments:

• Permanent Adjustments  –  to be applied in both current and subsequent fiscal years.
• Temporary Adjustments –  to be applied only in the current fiscal year and not in subsequent years.

Once the Finance Department is notified and registers the budget adjustments in the official financial records, these changes should be applied on the monthly Financial Reports, the monthly Available Balance Report, and on the applicable on-line files.

Use of Temporary Savings

Temporary expense savings may not be used in the current year for permanent, on-going expenses that will continue in the following budget year.

(Example: An employee takes a half year's leave of absence, but plans to return next year. If this expense saving is used in the current year to fill a new full-time permanent position, there will be a budget problem in the following year since to two salaries will be paid with the budget available for only one position)