Understanding the Deficit Reports

Two reports, one for Current and Recharge funds and another for Contract and Grant funds, were designed to highlight funds with deficits that will be cleared following the central campus deficit clearing process unless the department takes action to clear the deficit by the established deadline. The deadline for clearing a fund deficit for Current, Recharge, and open Contract and Grant funds is fiscal year end. The deadline for clearing a fund deficit for closed Contract and Grant funds is 120 days after the termination date of the award.

Please be familiar with the Deficit Policy before you run and review these reports. A brief tutorial on understanding the reports is provided below:

1. Deficit Report for Current and Recharge Funds

2. Deficit Report for Contract & Grant Funds

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1. Deficit Report for Current and Recharge Funds

   Deficits of Current and Recharge Funds are covered in the GL Sum Department Fund Program Deficits Report. As stated in the Deficit Policy, deficits in Current and Recharge Funds will be cleared at the Department (Level 4 Org Node), Fund and Program Code level. Therefore, as a first step we suggest clearing all Program Code deficits (where the Fund has a credit balance but one or more Program Codes has a deficit) by means of temporary budget journals. We suggest using the GL Sum by Five ChartFields to identify the more complete chartstrings for the journal and perhaps using account 58000 (Unallocated) for clearing the deficit in the chartstring. For deficits where there are no resources in the fund, more research is required to determine if there is an alternative fund source to which expenses can be transferred.

   Some illustrative examples of the relationship between the deficit report and the GL Sum by Five ChartFields (a common resource management tool) are provided below. In addition, please keep the following notes in mind when using the deficit report:

   • If your department has a deficit in at least one program code for a particular fund, you will see data for ALL programs for that fund. In other words, if you have a deficit in program code 44 and a credit balance in program code 40 (see first example below), you will see two rows on your report. You should consider doing a budget journal to reallocate funds between program codes to clear the deficit, if that is allowable under the terms and conditions of the fund source. If you choose to allow the central clearing process to move the funds between program codes, you will likely have to do clean-up journals, as you will not be satisified with the Dept IDs, ChartField1s and ChartField2s used. The central campus deficit clearing process uses a default org code and will not clear the deficit against the specific Dept ID, ChartField1, and ChartField2 where the deficit was incurred.
   • For funds other than gifts, activity in revenue accounts is included with expenses to determine the balance. Revenues are combined with expenses in the primary program code for the fund. See example provided below.
   • For gift funds, revenue is excluded from the report. Extramural Funds Accounting (EFA) manages and monitors revenue activity for these fund groups. Departmental users should not modify the revenue entries for these funds.
   • We encourage you to use the GL Sum by Five ChartFields as a second step, after the deficit report, to get more detailed information about the deficits (which Dept IDs, ChartField1s, ChartField2s, etc.) and to identify departmental resources available to cover the deficits.

   For the GL Sum by Five ChartFields examples below, only the Tempbudg and Actuals are displayed because Encumbrances and Pre-encumbrances are not included in either the deficit report or the deficit clearing policy.

   An example of a Program Code deficit in Non-C&G fund

   The GL Sum by Five ChartFields (run for dept revenue and all expense accounts):

   

   Note that Program 40 has a credit balance and Program 44 has a deficit.

   The deficit report:

   

   Note that both Programs appear on the deficit report to allow users to see quickly that they have resources in another Program that might be available to cover the deficit. Also, note that dollars appear in the Current Balance column for both Programs, but only the deficit amount appears in the Deficit to be Cleared column. A temporary budget journal should be done to transfer funds, if that is allowable under the terms of the fund source.

   An example of a deficit in a fund with earned income (revenue)

   The GL Sum by Five ChartFields (run for dept revenue and all expense accounts):

   

   A few notes:

   • Revenues can be identified in this report by the blank Programs, because we do not use Program Codes with revenue accounts.
   • The Primary Program Code for this Fund is 40, so the revenues will get combined with the expenses in Program 40 for the deficit report and clearing process (red box). If you aren't sure about the Primary Program Code for your fund, you can view this attribute of fund in BFS. Go to ChartField Maintenance, Fund Code, enter your fund number and view the first tab – Fund Definition.
   • There is a deficit in Program 43 (blue box added together).

   The deficit report:

   

   Note that the Budget and Actuals for the fund match between the two reports, and that the revenues have been combined with expenses in Program 40 (because it is the primary program code for this fund). The fund overall is not in deficit, but Program 43 is. That is why only Program 43 shows a value in the Deficit to be Cleared column. The department should consider processing a budget journal to reallocate funds between Programs, if allowable.

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2. Deficit Report for Contract and Grant Funds

   Deficits of Contract and Grant Funds are covered in the report titled GL Sum Department Fund Deficits Report – C&G Funds only. As stated in the Deficit Policy, deficits in C&G Funds will be cleared at the Department (Level 4 Org Node) and Fund level. Deficits are calculated by subtracting Expenses (Actuals) [please note that ONLY EXPENSE ACCOUNTS are used for the C&G deficit report] from Anticipated Funding, where Anticipated Funding is Tempbudg as of run date (usually once a month, a few days after the end of a calendar month, when the ledgers are closed) plus future funding. This concession is necessary as funding for multi-year awards are received at intervals that do not correlate with spending patterns.

   Exempt from the deficit clearing process are awards/funds that:

   1. have deficits of $300 or less
   2. are sub-awards where UC Berkeley is the recipient campus (includes Federal Flow-Through)
   3. have termination dates which are less than 120 days prior to fiscal year end (however, a view of these funds is also provided in the report for informational purposes)
   4. have been granted waivers in accordance with the Deficit Resolution Policy

   Definitions:

   1. Anticipated Funding = Award Amount (Tempbudg plus future funding)
   2. Distributed Award Amount =
      • For Primary Department, Anticipated Funding less Tempbudg distributed to other departments
      • For Non-Primary Department, Tempbudg Amount
   3. Distributed Award Balance = Distributed Award Amount less Actuals
   4. GL Balance = Budget (TempBudg) less Actuals
   5. Deficit to be cleared = Distributed Award Bal less Waiver Amount (Note: Pgm Code 80 (OH) deficits will be cleared to a Central Org. Departments are only responsible for the non-80 pgm code deficits)

   While it is difficult to correlate the results of the GL summary reports with the C&G Deficit report because of the use of Anticipated Funding (Award amount) and other exemptions that are built into the C&G report, the GL Sum by Five ChartFields is a good starting point. Please note the C&G deficit report results are always as of the most recently closed month. Therefore, current month expenditures do not appear on the report. In addition, a contract or grant may enter the 120 day exemption period in the current month but appear on the prior months report as subject to the clearing process. The GL Sum by Five ChartFields should be run for the period that just closed, in sync with the default period that appears in the C&G Report. From the 5CFs report you will be able to see the deficits and/or surplus by Dept ID/Pgm/ChartField1/ChartField2 and take the necessary corrective action as appropriate. If your department is not the primary department for the fund in deficit, and you are expecting additional funding, you may want to follow up with the primary department to get this funding allocated so that deficits are cleared from the C&G deficit report. If you are either the primary or non-primary department and if contract or grant funding is final, you will want to think of moving expenses to other fund sources (please check the terms).

   Screenshots from the C&G Deficit Report

   Dashboard

   

   Sort Selection Page

   

   The C&G Deficit Report by Department

   

   • Lists deficits by Department and Fund – for example, a user with L3 or L2 access will be able to see every department/fund in that L3 or L2.

   The C&G Deficit Report by Fund

   

   • Lists deficits by Fund and Department – a user with L3 or L2 access will be able to see every fund/department in deficit within that L3 or L2.
   • Also displayed are the Award Amount and the Primary Department's L4 code.

   C&G Deficit Report – 120 Adj Period

   

   • Lists funds which are in deficit, but within the 120 days adjustment period
   • They are listed by PI, Dept and Fund.
   • The award end date is also displayed, in addition to other financial data. The award date should be less than or equal to 120 days from the end of the immediately closed month… in the example above, end of February 2007.

   C&G Deficit Report – By Dept/PI/Fund

   

   • Lists deficits by Dept, PI and Fund.
   • A PI with multiple funds will have them grouped together.
   • The award amount is also displayed, in addition to other financial data. In most cases they should match the Distributed Award Amount.

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