Question

Fund:	222
DeptID:	IT REVOLVING ACCOUNT #777
Prepared By:
	Actual	Actual	Actual	Estimated	THREE-YEAR PLAN
	2014-15	2015-16	2016-17	2017-18	2018-19	2019-20	2020-21
SECTION 1: FINANCIAL DATA
A.  Beginning Balance	$114,112	$43,537	$61,994	$594,894	$468,994	$344,094	$219,194
B.  Revenue:  Misc	461	285	956	50,000	50,000	50,000	50,000
Revenue:  Sales Tax	(37)		(51)
Revenue:  Rental Income,O		13,750	38,000
Revenue:  Sale of Materials	716	264	710
Revenue Transfers	-	35,875	476,217
Total Revenue	1,140	50,173	515,832	50,000	50,000	50,000	50,000
C.  Expenditures
1.  Unclassified Salaries				60,000	60,000	60,000	60,000
2.  Classified Salaries
3.  LTE Salaries			5,998	3,500	3,500	3,500	3,500
4.  Regular Student Help
5.  Work Study
6.  Fringe Benefits			426	30,400	30,400	30,400	30,400
7.  Travel				2,000	1,000	1,000	1,000
8.  Services & Supplies:  M&R		12,195	53,016	120,000	120,000	120,000	120,000
8.  Supplies			495
8.  Food Contracts			195
8.  Services & Supplies: Main.	44,349	22,909
8.  Services & Supplies:  C&P	4,266	1,562	969
8.  Services & Supplies:  E&F		50	1,845
8.  Sales Credits	-	(5,000)	(80,011)	(40,000)	(40,000)	(40,000)	(40,000)
9.  Permanent Property: CE	23,100
Total Expenditures	71,715	31,717	(17,068)	175,900	174,900	174,900	174,900
D.  Net Revenue/(Loss)	(70,575)	18,457	532,900	(125,900)	(124,900)	(124,900)	(124,900)
E.  Ending Balance	$43,537	$61,994	$594,894	$468,994	$344,094	$219,194	$94,294
SECTION 2: NOTES
FY16 & FY17:   Transferring in revenue balances from other accounts so that this will be the only revolving account. Invoices will be charged to this account in future.
FY17:  Transferring in cash because expenditures in prior years posted to other IT accounts in error.
Account is used for infrastucture updates (e.g. routers replacement) and learning space renovation.
Year-end balance should fluctuate around $15K - $20K.
Background:
Unit directors update three-year plans for their program revenue accounts on an annual basis.
The document includes actual account activity for the preceding three years.
Unit directors indicate estimated activity for the current year and their plans for the next three years.
Questions:  1.  Any observations you would like to make about the actual activity of the past three years, and the estimated or planned activity for the current and next three years.
								2.  Any questions that the activities and/or the section 2 notes raise in your mind.
3.  Comments / suggestions on the three-year plan, its strengths and weaknesses, its sustainability over time, etc.

Answer 1

Ans 1): The actual activity in past 3 years is being driven by revenue transfers which implies that there is no actual activity related to this account. Also the sale is on the lower side compared to its expenses thus the support in terms of revenue transfers is taken to attain profitability in this account. Since there is no information regarding the nature of the business activity for the account the over all operational activity is considered poor.

Ans 2): The following questions arises froim the notes given:
- Is there any actual activity to this account because it is getting revenue transfers from some other IT account
- Transferring in cash because expenditures in prior years posted to some other IT account, does it imply that there is no activity/expenditure relate to current year and it is a compensating activity?

Ans 3): The 3 year forcast plan doesnot appear to be realistic because it is doesnot correspond to any prior year's activity.

- There is no assumprion base for the forcast. Also the revenues are not properly classified , thus doesnot give any information about the state of affairs in thuis account.

-Most of the incomes and expences are stagnant and doesnot show any trend improvement, wwhich is not realistic.
- Lastly the net recvenues are negative throughout, thus doesnot appear to be sustainable over the period on its own.