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Discretionary Spending

Staff and faculty within every unit have a responsibility to continuously exercise discretion in spending habits to help the university move toward a more financially stable position.

Discretionary Spending FAQs

Where can I obtain the reports for Purchase Order Commitment?

Reports for Open Commitments - Report 407 - Open and Closed Commitment displays supplier, concatenated chart of accounts segments, purchase order number, invoiced amount, status, and balances for the general ledger. Select “Line Status of Open” in the parameters to see open commitments only. Report 505 - Project Cost, Revenue, Budget, Commitments displays open commitments for projects

How does a purchase requisition or order affect the budget?

Purchase Orders and Commitments - The terms “commitment” and “encumbrance” are used interchangeably. Both terms mean a purchase order (PO) has been created to earmark funds for a specified purpose. When reviewing a report in the financial management system, the Budget-Actuals-Commitments is the available balance. Showing commitments on financial reports is a tool you can use to determine how much money remains on a PO that can be spent. The commitment will show on the project or general ledger string until the PO is invoiced against or closed out. If a PO is closed out before the end of a fiscal year, then the commitment will be reversed and the hold against the available balance will be removed. POs do not close out at the end of a fiscal year, which means commitments roll over provided that there is a balance on the PO.

Open POs and Funding - Commitments are a hold against an available PO balance. An open PO is a commitment and will lessen the available balance on a project string or general ledger string. Committed funds are not available for use for other purposes because they are set aside for payment of goods or services already ordered.

Commitments and Budgets - Closing a commitment does not change your budget amount. If you have a commitment at the end of a fiscal year and goods and services are not received before the fiscal year closes, then you should work with your department to secure funding for the following fiscal year as needed.

Open Commitments - All requisitions that are submitted for approval in RU Marketplace show as an open commitment in Oracle. When a requisition is approved and becomes a valid PO (RU Marketplace), then the requisition commitment is replaced with a PO commitment (Oracle). After an invoice is processed against a PO, the PO commitment is replaced with a charge to the Project or general ledger string. Once a month, the Controller’s Office manually removes open requisition commitments (Oracle) if the requisition was approved, withdrawn, rejected or returned. A cancel/close request can be submitted (RU Marketplace) to resolve a commitment issue if a PO number has been assigned.

Is the university planning to audit memberships, subscriptions and software licenses?

These categories are opportunities to realize savings and prevent future expenses due to software license non-compliance. In calendar year 2021, Audit and Advisory Services (AAS) will conduct three, unit-level, IT security and support audits to look at software licensing as a component of the audit. At the universitywide level, AAS works closely with the Office of Information Technology’s (OIT) Governance Risk and Compliance unit to develop a strategy for identifying software licensing at the unit level and partnering with University Procurement Services and OIT to track and monitor discretionary spending in this area.

What is in scope and out of scope for discretionary spending?

The discretionary spending approach is designed to reduce operating costs to meet Rutgers University budget challenges by focusing on incurring only necessary, appropriate, and reasonable expenditures for university’s mission. All Rutgers faculty and staff are being asked to exercise a continuous commitment to fiscally responsible spending​, use sound judgement to help maintain business operations and programs that are financially sustainable, and adhere to discretionary spending guidelines.
 

Discretionary Spending In-Scope: An expenditure that is not considered necessary, appropriate and/or reasonable, and can be avoided. This assessment is based on sound judgment by requestors, requisitioners and approvers within each unit to make fiscally responsible decisions about optional/non-essential purchases.

Discretionary Spending Out-of-Scope: Costs that are unavoidable, required for units to function, and/or must be incurred for mission-critical operations.

Discretionary Spending News

FY21 Year-end Guidance and Schedule

Posted on Friday, April 30, 2021

Discretionary Spending Guidance

Posted on Tuesday, October 27, 2020