25.02 - Controls Over Deficit Spending

A. General. This procedure outlines responsibilities related to balance management including but not limited to deficits and reserve or other balance requirements as established by the University. [rev. 7-20]

A-1. Fund Types Covered by This Policy. All operating funds, with the exception of sponsored programs and service centers, as well as unexpended plant (capital project) and renewal and replacement funds are covered by this policy. [rev. 7-20]

A-2. Definition of Deficit. A negative budget balance for fund types managed by budget balance or a negative fund balance for fund types managed by fund balance. Please contact the University Budget and Planning Office if you have questions regarding how a particular fund type is managed. [rev. 7-20]

A-3. Definition of Material Reportable Deficit. [rev. 7-20]

a. Any fiscal year-end deficit balance, regardless of amount, at the Level 3 Org level (as defined by the Banner organization hierarchy) for appropriated fund types (10, 20 and 24 as of this policy but please contact the University Budget and Planning Office to verify if needed) and the centrally allocated fund type (11). Any fiscal year-end deficit balance at the individual fund level in excess of $5,000 for all other fund types, excluding Sponsored Programs (fund type 22).

b. Please see APM Chapter 45 for policies and procedures related to Sponsored Programs (fund type 22).

c. Please see APM 20.20 for policies and procedures related to Service Centers (fund type 15).

B. Procedure – Operating and Renewal and Replacement Funds [rev. 7-20]

B-1. Individual Units. It is the responsibility of each unit to routinely review fund or budget balances, to resolve deficit balances not due to timing within a reasonable timeframe and no later than fiscal year end, and to adhere to any reserve or other balance requirements as established by the university.

B-2. Division of Finance and Administration. It is the responsibility of the University Budget and Planning Office or the office designated by the Vice President for Finance and Administration to communicate to campus current expectations and procedures used to implement this policy. These communications may include deficit reporting plans and other university actions aimed at managing university financial resources, including but not limited to the establishment of minimum balances or reserve targets.

The University Budget and Planning Office or other designated office will run periodic mid-year and fiscal year-end balance reports and identify deficit balances or balances not meeting established balance or reserve requirements.  These reports will be distributed to unit executives (vice presidents and president) with the expectation that units will work to resolve deficits prior to fiscal year end or to meet balance or reserve requirements.  The frequency of mid-year report generation and distribution is at the discretion of the Vice President for Finance and Administration.

Final reports of all balances will be generated after fiscal year end closing with remaining material reportable deficits or balances not meeting balance or reserve requirements highlighted. These reports will be distributed to the Vice President for Finance and Administration as well as the unit executives (vice presidents and president). Each executive office will be responsible for working with individual units to gather and approve the following:

1. Explanation of timing issues, or resolution plans for all material reportable deficits not due to timing, and
2. Resolution plans for all balances not meeting balance or reserve requirements should such requirements extend to the following fiscal year.

The Vice President for Finance and Administration should be notified of any approved resolution plans which extend beyond the next fiscal year end. Failure on the part of responsible units to reach resolution in accordance with approved resolution plans will result in the executive overseeing the unit being required to provide funding sources for the unresolved material reportable deficits or required balance or reserve.

C. Procedure – Capital Project Funds (Fund Type 90) [rev. 7-20]

C-1. Individual Units. It is the responsibility of the unit(s) sponsoring a capital project to provide project funding prior to any expenditures or expenditure commitments. A project may be funded in phases, but full funding for each phase must be in place prior to implementation. Exceptions must be approved by the Vice President for Finance and Administration or his/her designee.

C-2. Division of Finance and Administration. It is the responsibility of the University Budget and Planning Office or the office designated by the Vice President for Finance and Administration to review all capital project fund balances on a routine basis. The University Budget and Planning Office or other designated office will work with units throughout the fiscal year to ensure any material reportable deficits are resolved. The Vice President of Finance and Administration and the executive overseeing the unit will be notified of any unresolved material reportable deficit which does not have prior approval (see C.1).

D. Information. For additional information on budget management, reporting processes, or current reserve or balance requirements, please contact the University Budget and Planning Office at budget@uidaho.edu. [rev. 7-20]

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