Budget Adjustment (BA) and Budget Appropriation Transaction (BAT)

Summary: Budgeting in KFS is accomplished through one of two Financial Processing Transactions:

Budget Adjustment (BA) document (inception-to-date accounts)
Budget Appropriation Transaction (BAT) document (fiscal-year accounts)

BA: inception-to-date accounts are also known as contract, grant, and gift accounts/funds that follow a project begin and end date cycle, rather than a fiscal year cycle. For all inception-to-date accounts, budget and actuals are tracked over the life of the account. The KFS BA document is used to make and adjust budget entries to inception-to-date accounts.

BAT: fiscal-year accounts represent all other fund sources for which budget and actuals are tracked and closed each fiscal year. Fiscal year accounts can have a base (permanent) budget. Examples of fiscal year funds include: 199xx General funds, 095xx Opportunity funds, 1808x Lottery funds, 20xxx Student Fee funds, 6xxxx Sales & Service funds, 75xxx Reserve funds. The KFS BAT document is used to make and adjust budget entries to fiscal year accounts.

Budgeting Principals and how to interpret KFS Variance

Budgeting is an important financial management tool for planning and tracking both revenue and expenses. 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 expenditure object codes, 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 revenue object codes, 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). At FY close, all revenue budgets should be adjusted to equal realized revenue actuals so that the variance is zero.

BAT for KBM: For staff that have been trained and authorized to manage permanent funds for their unit using the KFS Budget Module (KBM), the BAT document is also used to process Base Budget (permanent) transfers.

Access KFS

Accessing via Zot Portal

The Budget Adjustment and Budget Appropriation Transaction eDocs can be found in the KFS Financial Processing portlet by clicking the plus sign next to Financial and Current Budget Transactions.

KFS Financial Processing portlet in Zot Portal with the plus sign next to Financial and Current Budget Transactions expanded to reveal Budget Adjustment and BAT eDoc links — In Zot Portal, locate the Budget Adjustment and Budget Appropriation Transaction eDocs by clicking the plus sign next to Financial and Current Budget Transactions in the KFS Financial Processing portlet.

Accessing via KFS Homepage

The Budget Adjustment and Budget Appropriation Transaction eDocs can be found in the Budget portlet of the KFS homepage.

KFS homepage Budget portlet displaying links to the Budget Adjustment and Budget Appropriation Transaction eDocs — On the KFS homepage, the Budget Adjustment and Budget Appropriation Transaction eDocs are listed in the Budget portlet.

Enter a Description and Explanation.

During the first five working days of the month an Accounting Period drop down will appear in the Financial Document Detail section. Use the drop down to select the month that the BA or BAT should be posted to.

KFS Financial Document Detail section showing Description and Explanation text fields alongside an Accounting Period drop-down menu — The Financial Document Detail section where you enter a Description, Explanation, and use the Accounting Period drop-down to select which month the BA or BAT should post to.

Year and Accounting Period will default to the current active month. Note: During the five business days of a new calendar month but before the prior period closes, either period can be chosen. If the prior period is selected, the transaction must go through final approval before the close date to post to the prior period.

Allocate budget for expenses to distribute funds already received as a budget allocation (BA or BAT).

From/Decrease an expense object code.

KFS accounting lines section showing a completed From/Decrease line with account number, expense object code, and current amount fields filled in — Example of a completed From/Decrease accounting line used to reduce funds from an expense budget allocation.

To/Increase another expense object code.

KFS accounting lines section showing a completed To/Increase line with account number, expense object code, and current amount fields filled in — Example of a completed To/Increase accounting line used to add funds to an expense budget allocation.

Complete Accounting Lines as follows:

a) To REDUCE funds from an expense budget allocation, enter the operating Account Number, expense budget Object Code, and Current Amount to be reduced on the From/Decrease line(s).

b) To ADD funds to an expense budget allocation, enter the operating Account Number, expense budget Object Code, and Current Amount to be increased on the To/Increase line(s).

Budget Object Codes

Budget Object Codes
Object Code	Object Code Name
0000	SALARIES ACADEMIC BUDGET
0001	SALARIES STAFF BUDGET
0002	SALARIES GEN ASSISTANCE BUDGET
0003	SUPPLIES AND MATERIALS BUDGET
0004	EQUIPMENT AND FACILITIES BUDGET
0005	TRAVEL BUDGET
0006	EMPLOYEE BENEFITS BUDGET
0007	GENERAL EXPENSES BUDGET
0008	UNALLOCATED FUNDS BUDGET
0009	RECHARGES BUDGET
0017	SUB AWARD BUDGET
009H	OH BUDGET

Allocate budget for projected revenue and distribute budget allocation to expense object codes (BAT only for most financial users; revenue BAs for inception-to-date funds are only processed by C&G Accounting).

Budgeting Revenue (Revenue-to-Expense):

a) To budget projected revenue and to enter the corresponding expense budget for how those funds are expected to be spent, the Revenue-to-Expense BAT transaction involves entering both transactions as To/Increase accounting lines and as positive numbers. The easiest way to remember this is that both the revenue and expense budgets are increasing.

b) To ADD funds to a revenue budget, enter the positive amount on the To/Increase line. The revenue budget should be posted to the appropriate revenue object code*.

To ADD the same amount to the appropriate expense budget object codes (0000, 0001, 0002, 0003, 0004, 0006, 0008, 009H), enter the positive number on another To/Increase line.

The offsetting transactions are both To/Increase lines. They offset because one is to expense (debit-normal) and one is to revenue (credit-normal).

KFS BAT document showing two To/Increase accounting lines — one for a revenue object code and one for an expense budget object code, both entered with positive amounts — Example Revenue-to-Expense BAT: both the revenue object code and the expense object code are entered as To/Increase lines with positive amounts, since both budgets are increasing.

Reducing Revenue Budget (Expense-to-Revenue):

To reduce a revenue budget, the corresponding expense budget must also be reduced. These transactions are the opposite of the above example and involve two From/Decrease lines that both have positive values.

c) To REDUCE funds from a revenue budget, enter the amount on the From/Decrease line.

d) To REDUCE the same amount to the appropriate expense budget object code(s), enter the amount on the From/Decrease line.

KFS BAT document showing two From/Decrease accounting lines — one for a revenue object code and one for an expense budget object code, both entered with positive values — Example Expense-to-Revenue reduction: both the revenue and expense budget entries use From/Decrease lines with positive values, reversing the Revenue-to-Expense transaction.

Note - Revenue actuals can be deposited to either an “Operating” account or a “Control Account” (UCxxxx). Operating accounts are for revenue and expenses. Control Accounts are for revenue and balance sheet transactions.

1) BAT accounting lines show the reallocation of budget from one Sales and Service operating account, expense Obj. 0008 (equivalent to budgeting to Sub 8), to another S&S account with the same fund. Transaction involves moving budget From-Expense Obj 0008 on one account, To-Expense Obj 0008 on another account.

Resulting ledger entries:

KFS ledger entry showing a From/Decrease line on the originating Sales and Service operating account with expense object code 0008 — Resulting ledger entry for the From side: budget is decreased from expense Object Code 0008 on the originating Sales and Service operating account.

KFS ledger entry showing a To/Increase line on the receiving Sales and Service operating account with expense object code 0008 — Resulting ledger entry for the To side: budget is increased to expense Object Code 0008 on the receiving Sales and Service operating account.

KFS pending ledger entries panel showing the posted budget reallocation entries between two Sales and Service accounts on expense object code 0008 — Pending ledger entries generated after the BAT transaction, reflecting the budget reallocation between two Sales and Service accounts on expense Object Code 0008.

2) BAT accounting lines show the creation of budget for revenue on a revenue object code, and the allocation of that revenue to one or more expenditure object codes. Transaction involves increasing both budgets: To-Revenue Obj Code S754 (Rxxx/Sxxx/Txxx/0009) and To-Expense Obj Code 0008 (or expense budget object codes: 0000, 0001, 0002, 0003, 0004, 0006, 0008, and/or 009H).