UC San Diego SearchMenu

Administrative Responsibilities: Principles of Financial Management

Read about administrative officials' responsibilities in the area of financial management.

Financial management

Administrative officials must manage resources in an efficient, cost-effective manner.

Principles

  • Annual budgets delineate the resources necessary to achieve goals, measure financial performance, and provide a realistic view of the projected cost of operations.
  • Units operate within budget and eliminate projected deficits.
  • Significant budget variances are accounted for, evaluated, and addressed.
  • Expenditures comply with relevant policies, rules, and regulations.
  • Financial consequences are evaluated before existing activities are changed or eliminated and new activities begin.
  • Significant transaction errors and changes in business conditions are properly addressed.
  • Anticipated benefits are greater than or equal to costs.
  • University resources are used as intended.

Responsibilities

  • Planning and budgeting activities: The budget process begins with a mission statement that identifies, implements, and evaluates activities required to achieve university goals and objectives. Gathering and analyzing data should be performed in a consistent manner, with sufficient detail and descriptive narrative to clearly portray how operations are financed and how risks are managed.
  • Creating, monitoring, and evaluating financial data: Care should be taken that the classification of costs entered into the financial systems results in a fair representation in the university's financial statements. Monthly financial reports should accurately represent budget to actual fiscal activity, identify funding sources, and categorize expenditure data to help identify future trends and highlight problem areas. Sampling of financial transactions ensures that expenditures are appropriate and that the cause for any significant variation is understood.
  • Safeguarding university assets: Assets must be protected from loss or unauthorized use. Annual equipment inventory reviews documenting adjustments to asset records are conducted. Review of delinquent account balances and collection/ write-off efforts occur on a periodic basis. Cash or cash equivalent collections must be accounted for, secured properly, and deposited in a timely manner.