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Proper set up and recording of transactions in government program budgeting tool

I work in the Financial Management department of a U.S. government agency. We use a MS Excel-based budgeting tool with which we record allocations of and expenditures from program budgets. In addition to budget allocations and expenditures, I need to incorporate in this tool the recording of program funds set-aside for realignments between programs and would like to identify some appropriate ways to do so.

Questions:

- Is it appropriate to consider this budgeting tool a ledger and record realignment allocations as debits to and credits from the program account?
- If so, would the program account be considered an asset account with a debit normal balance?
- Is it appropriate to design a special journal to enter set-aside amounts to and from applicable programs?
- As a budget manager, how would you design this tool to incorporate the proper recording of program set-asides?

Answers

Len Green
Title: Performance Improvement Consultant and E..
Company: Haygarth Consulting LLC
LinkedIn Profile
(Performance Improvement Consultant and ERP Strategist, Haygarth Consulting LLC) |

Hi
I think for me the knock out issue is Excel cannot be relied upon as a "ledger." No audit trail of changes.
Is your goal to manage just budget numbers, or budget and actual? If so, what can you do within your GL using budget journal entries that at least provide a trail?

E. Stephen Kim
Title: Financial Management Analyst
Company: U.S. Department of Defense
(Financial Management Analyst, U.S. Department of Defense) |

Thanks for your interest, Len! I should clarify.

We currently use the MS Excel tool to record and manage program funding allocations, expenditures, and realignments, not traditional budgeting. As a region-level organization, we don't have access to modify GL accounts. This tool is being used as an unofficial set of books to reflect program funding activities in our budget management system, which feeds into the GL.

In the tool, we have a ledger of sorts on which we record program transactions, including date, program, amount, funding type, etc., and we also retain digital copies of the funding documents, so I think this may provide some semblance of an audit trail. Given this, I'm trying to figure out how best to incorporate the recording of program set-asides (for realignment purposes) into the ledger's current design.

I've recommended two options:

1. Adding a new column to the ledger to record set-aside amounts or two new columns to record set-asides as both debits and credits, OR
2. Creating a special journal to record set-aside amounts and updating the ledger on a regular cycle.

However, I'm wondering if I may be trying to impose standard accounting practices into the design of this tool when it's not really necessary.

Len Green
Title: Performance Improvement Consultant and E..
Company: Haygarth Consulting LLC
LinkedIn Profile
(Performance Improvement Consultant and ERP Strategist, Haygarth Consulting LLC) |

I'm not an expert on govt body accounting, so pardon this question: are you trying to apply flexible budgeting?

By flexible I mean the need to reduce a budget allocation for one program to be able to increase that saving for another program that is going to cost more than originally budgeted?

Also, why don't you use your budget management system, which feeds into the GL, as you point out above? Can't you reallocate funds there?

E. Stephen Kim
Title: Financial Management Analyst
Company: U.S. Department of Defense
(Financial Management Analyst, U.S. Department of Defense) |

Yes, essentially that's what we're doing with the program fund set-asides -- decreasing the budget of one program to reallocate to and increase the budget of another. We don't use the budget management system to do this because it is owned and managed by our HQ entity and doesn't have the functionality to record and account for set-asides, therefore we keep a separate set of books to account for these and other realignments.

Good questions - thanks!

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