FINANCIAL PLANNING AND REPORTING

POLICY STATEMENTS

The goal of the University’s budget planning process is to achieve a balanced budget while maximizing resources and allocating those resources to align with the University’s strategic mission. To achieve this goal, the University has a responsibility to submit a five-year budget to the Board of Trustees each year. The Board of Trustees approves the five-year budget which includes the significant revenue and expense categories. This policy outlines the University’s annual budget process and describes the budget components and other related procedures integral to the process.

PROCEDURES

Financial planning is integrated with strategic planning and evaluation processes of the University. The budget process is an inclusive and collaborative effort with the President making final decisions on new funding requests and budgets, prior to the Board approving the budget.

The budgeting process starts with each departmental budget proposal based on the previous year’s actuals and the strategic plan. The Chief Growth Officer is responsible for preparing new enrollment projections. Each department represented on the Leadership Team reviews revenue and expense items related to their departments. The proposals are submitted to the CFO in January. The CFO generates the actuals of the current year with the departmental projections and submits the report to the President.

In February, the Leadership Team focuses on finalizing the budget using the projected number of incoming students, tuition rate increases, scholarship rates, new sources of revenue, and personnel growth expectations. New sources of revenue are reviewed by the administration and Board to ensure the integrity of the institution and standards of quality. New degree programs are initially discussed in the Academic Team meetings and the Curriculum Committee. New non-degree programs are initially reviewed
by the director of Partnerships and Outreach. Any non-academic revenue opportunities are first reviewed by the CFO. The President then discusses new revenue sources with the Leadership Team to consider any ethical, academic, and financial concerns.

The President shares the budget proposal with the Finance Committee of the Board which usually gathers in March or April, before the board assembly in May. This committee has policy decision responsibilities with respect to institutional budget, property acquisitions, financial procedures, and other matters that
pertain to the financial support and fiscal health of the University and facilities. The Board approves the final budget during the May meeting.

The President shares the approved budget the University staff at a general meeting.

The CFO reports monthly to the President on the financial condition of the University. The President shares quarterly reports of the actuals versus budgeted with the Leadership Team. Any variances are discussed with the appropriate division head to identify the causes and ensure that appropriate action is taken.
Department leaders use this information to monitor their department budgets, considering departmental, and institutional, strategic goals as well as identified critical needs essential to informed fiscal decision making.

DEFINITIONS

–

EXCEPTIONS

None

POLICY STATEMENT

BAU prepares regular financial reports on a monthly basis. All reports are finalized no later than ten (10) days after the close of the prior month.

PROCEDURES

The CFO is responsible for producing the following year-to-date reports within ten (10) days of the end of each month: Statement of Financial Position, Statement of Activities, Budget v. Actual and updated Cash Flow Projection.

The CFO prepares reporting entries to ensure quarterly and annual financial statements are accurate and in accordance with GAAP. All reporting entries must be accompanied by sufficient supporting
documentation and approved in accordance with BAU’s journal entry policy.

Period 14 entries made as part of the annual financial reporting process will be reviewed for materiality and potential misstatements. Only material adjustments that are necessary to comply with GAAP will be recorded. Period 14 is only opened as needed and all entries must be approved for posting by the CFO
prior to opening Period 14.

The CFO and the President review financial reports each month. The President submits semi-annual and annual reports to the Finance Committee of the Board of Trustees.

On a quarterly basis, the CFO prepares a narrative report that summarizes the organization’s current financial position and includes explanations for budget variance. At least quarterly, the CFO ensures proper elimination of all material intercompany activity within the financial statements.

Any financial reports to outside parties must be approved by the President prior to distribution.

DEFINITIONS

–

EXCEPTIONS

None

POLICY STATEMENT

The University requires that an annual external audit of the University’s financial statements be conducted. This policy governs the engagement of an external audit firm.

PROCEDURES

The Board of Trustees appoints the external auditor of the University annually. The audit committee recommends an audit firm to the Board of Trustees for their consideration.

The purpose of the audit committee is to oversee the Institution’s financial practices and standards of conduct. The committee is responsible for (i) overseeing the external financial audit, (ii) ensuring compliance with legal and regulatory requirements, and (iii) monitoring internal controls and risk management systems. The committee shall have authority, through its chair or a majority vote of its members, to ask management to address specific issues within the mandate of the committee as well as the authority to engage independent legal counsel and other professional advisers to carry out its duties. The audit committee chair shall not be a member of the finance committee.

The CFO serves as the staff liaison to the audit firm.

The draft audit report is shared with the audit committee for review. The final report is submitted to the Committee after the reviews, which is then presented to the Board of Trustees. The audited financial statements are approved by the Board of Trustees.

DEFINITIONS

–

EXCEPTIONS

None

POLICY STATEMENT

The University is subject to taxation and reporting requirements from the Federal Government and the District of Columbia. To comply with these requirements, the CFO sets procedures to ensure compliance with these requirements and ensure timely submission of required returns and remittances.

This policy applies to all faculty and staff in the conduct of the University financial affairs. All faculty and staff are required to provide information on activities which may have tax and reporting requirements.

PROCEDURES

The CFO prepares and submits the tax forms. The President reviews the tax returns prior to filing and has the ultimate approval authority. The 990 Form is made available to the Board of Trustees after the submission, at the earliest Board Meeting. The 990 Form is published on the webpage of the University for public disclosure.

Payments for compensation to employees of the University are generally subject to Social Security and Medicare taxes as well as Federal, State and Local income tax withholding. It is the responsibility of the HR Department to collect proper documentation to correctly withhold and remit these payments.

The payroll tax reporting is prepared through the payroll software (APS). The Director of Human Resources is responsible for preparing employee W2s by January 31 each year. The CFO oversees this responsibility to ensure accuracy and timeliness. The Director of Human Resources files quarterly payroll tax reports via the payroll software (APS) by the filing deadlines. The CFO oversees this responsibility to ensure accuracy and timeliness.

Non-cash benefits provided outside official University benefit plans (Retirement, Tuition Remission, Health Insurance, etc.) may have tax consequences for the individual. Before providing any compensation or reimbursements, staff are required to review the tax consequences of their planned transaction with the Director of Human Resources in advance of the commitment to the individual to ensure proper tax treatment. Disclosure to the individual must be made to inform them of the University’s treatment of the benefit, but no personal tax advice is provided by the University to the individual. The individual should be encouraged to seek their own tax advice from their personal tax advisor or through their own research.

The University is required to pay Real Property tax on property not used for the educational mission.

DEFINITIONS

–

EXCEPTIONS

None