Process

The operating budget planning process at Penn consists of two rounds. In the first round, Schools and Centers submit current year forecasts and a five-year budget plan that includes an initial budget submission for the upcoming year. The submission must be accompanied by a budget cover memo as well as input assumptions. The first round submission is reviewed in discussions with senior management during the fall and winter for schools, and during the winter for resource centers and administrative centers.

In the second round, which starts in the spring, Schools and Centers receive a "guarantee" letter that documents the agreed-upon plan and associated guarantees, parameters, and other guidelines. Schools and Centers then submit a revised current year forecast and a final budget for the upcoming year. This final budget submission is then reviewed by the Budget Office for consistency with the guarantee letters and for variances versus the initial submission. Significant variances versus the initial submission must be explained in a memo to senior management, with a copy to the Budget Office. Once the final budget for a School is approved, it is consolidated with the other School and Center submissions for approval by the Board of Trustees. In preparation for the upcoming fiscal year, the budget is loaded into the general ledger in June.

The live version of the budget is classified as the "Working" budget in the Planning budget application. In addition, snapshots are taken at various times throughout the year. The most significant snapshots are the "Meeting" version and the "Final" or "Spring" versions. The Meeting version is the initial version of the budget discussed at the Center's budget meeting; the Final or Spring version corresponds to the final approved budget submission. Typically, the only difference between the Final version and the Spring version is that the Spring version includes input assumptions that are not yet loaded to the general ledger, while the Final version reflects only the data that was uploaded to the general ledger.