This article is dedicated to helping you plan your budget, stick with it, and ensure proper records are kept. EUS has different budgeting requirements for different groups, which you must follow; you will find that budgeting for taxes and record verification are two areas which are not intuitive, yet critical for your organization.
Internal Records v. EUS Records
It is useful to clarify the distinction between budgets, internal records, and EUS records.
- A budget is a plan of expenditures and revenues for the year. It is not a request for funding – it is a forecast of where money is coming from and where it is leaving. A budget should be as accurate as possible, and should be binding (unless something unexpected comes up – in that case you must get the appropriate approvals to deviate from the budget). There should be some flexibility built into budgets to avoid overspending.
- Internal records are the records that your group keeps of all expenditures and revenues as they are made. The EUS generally does not monitor how you keep your internal records, but it is expected that you do so, because EUS records can be cumbersome to work with, and internal records are the only way you can check the accuracy of EUS records.
- EUS records are the records that the EUS keeps. Every expense that gets reimbursed, every revenue that goes into the bank account, and every transfer of funds between groups goes into the EUS records. EUS keeps its records on professional accounting software, and we have a paid bookkeeper (Isabella) who comes in every Wednesday to update the records. These records are the bottom line for how much funds you have, which is why you need to compare your internal records against them. Sometimes there are mistakes, sometimes you forget whether a cheque has been received or cashed, and sometimes there may be large discrepancies between internal and EUS records. This is why record verification is so important!
Services & Committees
As an EUS Committee or Service, you are required to request a budget from the EUS. This budget will be reviewed by a Budget Review Committee, and it will subsequently go to EUS Council for approval in the fall semester. The VP Finance will contact you when it is time to have your budget prepared. Make sure to follow all deadlines, and ask any questions you have.
Make sure that you review the previous year’s budget, and look at the transactions in last year’s EUS accounts to see the actual expenditures and revenues. It is possible that expenditures and revenues varied from what was budgeted last year, and it is possible that you will be planning different activities this year than you did last year – this is fine, but talk to the VP Finance well in advance if you believe that total revenues or expenses will be significantly different.
For some committees, it is acceptable to run a budget deficit. The EUS is not-for-profit, and providing student services through committees and other means is how we give back to students. That being said, we are not overflowing with money, and it is expected that every committee do as much as possible to keep expenses reasonable and to seek revenues.
Clubs & Design Teams
Clubs and Design Teams are responsible for maintaining their own internal records. They are not required to submit a budget to the EUS, except when applying for funding or when applying for club/ design team status for the first time. The EUS’s main requirement is that they do not spend more than is in their accounts. However, because they handle their bookkeeping through the EUS, they should liaise with the VP Finance and monitor their activity in the EUS accounts to ensure that their activity is being recorded properly.
Departments are similar to clubs and design teams in that they are not required to submit a budget to the EUS (at least not normally), and are responsible for maintaining their own internal records. The EUS’s main requirement is that they do not spend more than is in their accounts. However, because they handle their bookkeeping through the EUS, they should liaise with the VP Finance and monitor their activity in the EUS accounts, to ensure that their activity is being recorded properly.
It should be noted though that departments are more “internal” to the EUS than clubs and design teams, and the EUS VP Finance may request any information from the departments provided that adequate notice is given (such as End-of-Year Financial Reports, or even End-of-Semester Reports). The EUS has this power because the departments are legally a part of the EUS, meaning that their finances are EUS finances.
Make sure to always budget conservatively. You should slightly overestimate expenses and slightly underestimate revenues. When it comes to revenues, like sponsorship, which you have not received in the past, or fundraisers that you have never done before, underestimate incomes significantly. Remember, always think in the worst case – for example, if you had 50 attendees at the event last year and hope to get 70 this year, make sure that the budget won’t go over if you only manage to get 40.
Use enough budget categories that you have a meaningful picture of where money goes and where you might be able to cut costs. You don’t need to budget down to the penny though, because you need some flexibility when it comes closer to when you are going to be running your activities. Try to budget slightly higher on individual items than you expect, but not too much higher, especially on large items. For example, if you expect to spend $16 on a power bar, budget for $20. But for a larger expense, like $2000 on a dinner, don’t budget more than say $2100, because it is important to have boundaries on the most expensive items. If you are unsure, talk with the VP Finance.
If you are part of a very large group where unexpected expenses are likely, add a small contingency budget, say of 5%, and discuss the budget with the VP Finance or Finance Director.