Balance Types and Variances

Balance Type Code

Balance Types are used to categorize types of transactions in KFS. All posted transactions in KFS are assigned a balance type. Below is a list of the balance types used at UCI for KFS:

Budget Balance Types

Balance Type Code

Balance Type Name

Description

BB

BASE BUDGET

The Base Budget is developed incrementally throughout the current fiscal year and becomes the unit’s initial operating budget allocation for the next fiscal year.  Only certain sub-fund group funds are “budgeted funds” and can be permanently budgeted.  Extramural funds (contracts, grants, and gift) are not budgeted funds.

CB

CURRENT BUDGET

The CB balance type is used for in-year budget vs. actual information through the use of the Available Balances or Balances by Consolidation inquiries. CB is also used for Contracts and Grants and other inception-to-date budgets.

 Actuals (Financial) Balance Types

Balance Type Code

Balance Type Name

Description

AC

ACTUALS (FINANCIAL)

Actuals is an actual number experienced through some point in time as opposed to a number that is budgeted or projected into the future. For example, expense and income transactions are recorded using the AC balance type. This will likely be the most commonly used balance type.

 Encumbrances Types

Balance Type Code

Balance Type Name

Description

CE

COST SHARE ENCUMBRANCES

Encumbrances with a CE balance type are created on the cost share funding account whenever an encumbrance is created on the actual Contract and Grant cost share sub-account.

EX

EXTERNAL ENCUMBRANCE

Commitment of funds generated by purchase orders are recorded using the EX balance type.

IE

INTERNAL ENCUMBRANCE

Internal Encumbrances represent the commitment of funds generated by either Facilities or a Travel Authorization document.

PE

PRE-ENCUMBRANCE

Pre-encumbrances, created and relieved using the Pre-encumbrance e-doc, allow departments to further commit funds to facilitate financial management.

 Special Balance Types

Balance Type Code

Balance Type Name

Description

MD

MC MEMO DOCUMENT

Used only by the Medical Center for depreciation.

NB

CLOSE NOMINAL BALANCE

The NB balance type is only used when entries are made at end of year to "zero out" all revenue and expense object codes (on high-level object codes) and close them to the fund balance object code.

Variance

Variance is the difference between the available budget and the actual amounts, plus encumbrances for an object code or category.

An expense budget is used to represent available resources to spend.  The Budget is compared to Actuals (Financial) and Encumbrances during the year.  In KFS, balance inquiries show a field termed “Variance”.  For the Basic Accounting Category Expense, Variance = Budget – Actuals – Encumbrances. A positive variance means that actuals and encumbrances are less than the amount budgeted (good).  A negative variance means the account is over spent (bad). 

A revenue budget is used to represent projected revenue/income and is compared to revenue actuals received during the year to track progress.  In KFS, the Variance column on revenue object codes is calculated differently than for expenses.  For the Basic Accounting Category Income, Unrealized Revenue Variance = Actuals – Projected Budget.  A positive variance means that actual revenues exceed the projected budget (good).  A negative variance shows the amount of projected revenue that is unrealized (bad if nearing the end of the budget cycle and actual revenues fall short of projections).