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Budget Basics

Budget Terminology

Chart of Accounts – Account structure in IC Finance Cloud used in the reporting and tracking of financial information.

Account Number – Contains 28 digits that are divided into 10 segments.  Each segment is separated by a period.  These segments better organize the College’s financial information. Click here for more information.

Encumbrance – Reservation of funds that have not yet been spent.

Obligation – An encumbrance created by an approved requisition.

Commitment – An encumbrance created by an approved purchase order.  When the purchase order is created, it reverses the requisition encumbrance.

Funds Available – The total funds available for each project is your budget less your encumbrances, less your total expenses (actual).  In order to create a new requisition, process a payment or reconcile a card transaction, you cannot exceed your available funds. 

Funds Checking Category – A total that shows the sum of balances from multiple detail accounts and is used for funds checking.  These categories are set up for ONLY “01” funds and are by department and project. Click here for more information.

Original Budget – This is the Board approved budget and is “static” and does not change.  There may be adjustments done to this budget as a result of a re-organization or a permanent allocation from one account to another.  Any changes to the Original Budget must be made by the Budget Office.

Adjusted Budget – This is the “flexible budget”.  Throughout the fiscal year, end-users may enter changes, to the Adjusted Budget only, to better reflect the daily operational needs within the departmental budgets.  These adjustments revert back to the original for the next fiscal year.

Variance Report – The report either compares the Actuals to the Adjusted Budget or the Actuals to the Original Budget.  The report assists in monitoring the budget and to recognize the reasons for the variances. 

Budget Transfer – A means of moving available dollars within or between departmental budgets.  This is a temporary adjustment to the budget, which only affects the current fiscal year.  The transfer does not adjust the budget for the following year.

Fiscal Year – A twelve month period that coincides with the budget, spanning between July 1 and June 30.

General Ledger – The general ledger is the official record of the College’s budget and financial transactions.  The GL includes budget transactions, revenue and expense transactions, encumbrances, assets, liabilities and fund balances.