STRATEGIC MANAGEMENT ACCOUNTING

Strategic Management Accounting

Strategic Management Accounting

Part A:

Cost Center management

Cost centers are designed to accumulate costs related to an operational department of the college or to a specific activity. Within a department, there can be multiple cost centers for managers who handle multiple services. A manager may want two cost centers within a department to assist in tracking and monitoring significant costs. An example of using two cost centers is one cost center for human resources, with an additional cost center to track and monitor expenses related to recruitment.

Responsibilities

Vice Presidents - Area vice presidents oversee their budgets and those of their managers. When acting as a cost center manager, each Vice President is subject to the same responsibilities as cost center managers.

Cost Center Managers Advantages

Cost Center Managers - The cost center managers are fiscally responsible for the transactions charged to the center. The managers are responsible for developing the annual cost center budget of revenues and expenses for the upcoming year in conjunction with their vice president.

Cost center managers are responsible for properly coding revenue and expenses on accounting documents as detailed in the chart of accounts. They must abide by all purchasing procedures. They are required to monitor and review the monthly financial reports that detail expenses and revenues to verify the accuracy of the data contained in the reports. Discrepancies are to be brought to the attention of the finance office, within a month of receipt by the cost center manager, to assist in proper accounting of revenues and expenses by functional area.

Throughout the year, managers are responsible for the operations of their departments using the fiscal allocations within their cost centers. They are required to follow written policies and procedures of the college and exercise fiscal responsibility when spending college funds. Expenses should be necessary, reasonable, fully documented, and coded to the appropriated expense category within the managers' budgets.

If a cost center manager will be away from campus, signature authority may be delegated to another individual in the area. If this occurs, notification must be given to the finance office and the area vice president. Delegation of signature authority does not relieve the cost center manger of the ultimate responsibility for the cost center. If over expenditures of a cost center are made during this period, the cost center manager will be held accountable.

In general, Cost Center Managers are individuals who have been delegated the responsibility for monitoring and reconciling the Cost Center Status Reports (CSRs). Typically a Department Chair, Program Director or Principal Investigator (PI) has delegated this responsibility to them. Cost Center Managers may have signature authority up to $2,500 as delegated by their supervisor.

In general, all Cost Center Managers are required to:

Monitor and reconcile the Cost Center Status Reports (CSRs) on a monthly basis.

Verify that there is source documentation (expense voucher, purchase order, email, etc.) for all transactions.

Verify that transactions are in accordance with University and Main Campus policies and procedures.

Verify that all ProCard charges have been reallocated from the default ...