GENERAL TERMINOLOGY

Financial Records System (FRS) The University’s official accounting system. All university funds are administered through FRS and all financial related applications are integrated with FRS. This includes the Human Resources Information System (HRIS).

Account (A numeric code representing) a unique entity of funds to be accounted for. Examples: English department state appropriated funds
Federal NIH grant to maintain statistics on certain diseases.

Object (A numeric code representing) a particular category of expenses. Expenditures and encumbrances always occur at this level. Budgets may occur at this level or the object pool level. Examples: SPA on-campus salaries, office supplies, air travel.

Object Pool (A high level numeric code representing) a pool of objects for which a budget is set up. Expenditures and encumbrances are not allowed at this level. See ABR definition for additional information. Example: SPA Regular Salaries (a pool representing SPA on-campus, SPA off-campus,
and SPA Cost of Living Differential Pay)

EQUATIONS AND PROCESSES

Automatic Budget Reallocation (ABR) The process used in FRS to move budget from the object pool to the detail object whenever an expenditure or encumbrance occurs at the detail object. FRS will only move the budget when the detail object is operating as part of an object pool. If a budget is entered at the detail object level, then ABR is ‘turned off’ for that object and it will not operate as part of the object pool.

Budget Position Equation The budget position equation for state appropriated and overhead receipt accounts in HRIS is:

Budget - Allocated (Position Funding) = Unallocated (Budget Available)

Financial Monitoring Equation The general financial monitoring equation for all funds in FRS is:

Budget - Expenditures - Encumbrances = Budget Balance Available

FINANCIAL TERMINOLOGY

Budget A budget represents the dollars that are available to fund positions for a particular object or object pool. For state appropriated and overhead receipt accounts there are two budget amounts maintained in FRS that are used in HRIS; current year budget and future year budget.

Expenditure A disbursement of funds (spending of dollars) against a particular account/object combination. An employee’s paycheck is recorded as an expenditure. For this discussion, a journal entry is considered a disbursement even thought it does not actually disburse cash. Therefore, journal entry activity is reflected as expenditures.

Encumbrance An obligation (commitment) to disburse funds (spend dollars) in the future. An HRIS encumbrance represents those dollars that will be paid to an employee (expended) from this account over the remainder of the budget period.

Budget Balance Available (BBA) The remaining amount available after allowing for all funds disbursed or obligated to be disbursed against the budget for a particular account/object combination. This is the amount that is available for funding new positions or increases to current positions from this account for the budget period.

Budget Period A period of time for which funding (dollars) is (are) allocated. The state of North Carolina’s fiscal year runs from July 1 through June 30 and therefore is the budget period for state appropriated and overhead receipt funds. For other funds it may be for any duration and will not necessarily coincide with the state’s fiscal year.

Fiscal Accounts An account whose budget period is July 1 through June 30. State appropriated and overhead receipt funds and some institutional funds are considered fiscal accounts.

Project Accounts An account whose budget period is not associated with the state’s fiscal year of July 1 through June 30. The budget period for project accounts may cover multiple years, may be less than a year, or may begin and end in any month. Project accounts have attributes in FRS, which define the budget period. The end date of the budget period is referred to in HRIS as the project end date. HRIS does not encumber beyond the project end date for positions funded from project accounts.

State (Appropriated) Funds Those funds that are appropriated by the NC State Legislature and administered through the Office of State Budget and Management (OSBM).Overhead (Receipt) Funds Those funds that are collected from Contract and Grant funds to provide facilities and administrative support for the contract and grant projects. In fact, these funds are now being referred to as Facilities and Administrative (F&A) funds. These funds are legislatively controlled and are therefore monitored much the same as state appropriated funds.

The following definitions are applicable for state appropriated and overhead receipt funds only:

Current Year Budget The operating budget available to fund positions for the current fiscal year only. The current year budget will contain budget dollars that are continuing and non-continuing. Current year budget is used in the financial monitoring equation to determine the current budget balance available.

Future Year Budget The permanent budget that is available to fund positions on a continuing basis. The future year budget will only contain budget dollars that are permanent in nature. The Future year budget is used in the budget position equation to determine unallocated budget.

Continuing Budget Budget that is available to this account for the current year and for future years. Also referred to as Permanent Budget.

Non-continuing Budget Budget that is available to this account for the current year only. Also referred to as Temporary Budget.

Allocated (Position Funding) The total of all positions currently funded from this particular account/object combination. The total includes positions that are filled, vacant, funded, and/or budgeted.

Unallocated (Budget Available) The remaining amount available after allowing for all positions currently funded against the permanent budget for a particular account/object combination. This is the amount that is available for funding new positions or increases to current positions from this account on a permanent basis.