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1103 PR.01 University Budgeting: Year-End General Appropriations ("GA") Surplus or Deficit Requests and Approvals
Revision Date:
April 26, 2024
Contents
The purpose of this procedure is to promote sound budgeting management practices. This procedure describes the steps a planning unit Lead Administrator is required to take in order to receive an approval of a year-end request to retain a General Appropriations (“GA”) surplus, carryforward unspent capital funds for systems & equipment, or receive additional GA support due to a budget deficit.
A. GA Surplus
Fund Accounting practices define the appropriate order in which to utilize funds to support expenses. The proper order of usage is from most restrictive to least restrictive. GA Support is the least restrictive funding source available to a planning unit. During the fiscal year-end close, a planning unit may have positive net results in the unit-responsible GA funding source (defined as activity in YD000002 and YD000004). A unit may anticipate operational activity in the following fiscal year that they would like to fund with the residual GA Support of the current fiscal year. When this exists, the planning unit may request to retain a defined amount of the GA Surplus by following this established procedure. A unit may only initiate a request to retain a GA surplus if the available balance is due to excess GA Support. Units with surplus balances due to over allocation or over assessment charging must complete a true-up calculation during year-end and return any surplus funds to the originally charged planning unit(s). Initiating a journal entry to transfer a Net Results surplus, debiting FD30, and crediting a different non-FD30 fund, without approval from Budget Strategy, is not allowed.
B. Unspent Capital Funds
Planning Units may receive approval during the annual operating budget request process to purchase systems or equipment utilizing central capital funding. A unit may encounter delays in the planned spend due to adjustments to a project plan, supply chain challenges, etc. If a unit does not expect to spend the capital funds in the same fiscal year in which the funding is approved but expects to make the planned purchase in the following fiscal year, the unit may request to carryforward unspent capital funds.
C. GA Deficit
A planning unit may generate a year-end deficit due to unforeseen changes in activity that impact revenue and/or expenses. At year-end, a planning unit with a residual unit-responsible GA deficit (defined as activity in YD000002 and YD000004) that cannot be supported through any other funds within the unit’s control, must request additional GA funding during the year-end close. When calculating the year-end deficit amount, the planning unit should remove any previously approved out-of-budget requests.
The planning unit Lead Administrator should work with unit leaders to define the year-end request.
In the case of a GA Surplus request, the unit should quantify how much funding it would like to request to carry forward. In the request, the unit should detail the planned use of the carryforward funds. Units should only request GA Surplus funds for either one-time activity or activity the unit budgeted for in the current fiscal year but did not complete in the fiscal year and has no budgeted funding in the next fiscal year. It is not appropriate to request a carryforward for on-going activity that has a budget in the next fiscal year.
In the case of a request to carryforward unspent capital funds, the unit should quantify how much funding it would like to carryforward. In the request, the unit should detail the planned use of carryforward funds.
In the case of a GA Deficit request, the unit needs to quantify the total deficit, net of any out-of-budget requests previously approved. An explanation of the variance is required. The unit must confirm it already utilized all allowable alternate funding before bringing forward a GA Deficit for consideration.
The planning unit Lead Administrator should use Form 1103 FR.01 University Budgeting: Year-End General Appropriations (“GA”) Surplus or Deficit Request to document the request. The Lead Administrator should submit the form along with the year-end narrative and required financial schedules by the Financial Planning & Analysis deadline for year-end submission. The Lead Administrator should save the form in the planning unit’s year-end folder on the bo-server. Additionally, the planning unit Lead Administrator should include this information in the year-end narrative as requested in the year-end narrative template.
The Lead Administrator, or requestor, submits the completed request to Budget Strategy for consideration. The year-end closeout Budget Strategy meeting, during which requests are considered, is typically held the first week of August. The Assistant Vice President for Financial Planning & Analysis consolidates all year-end materials and delivers the request to Budget Strategy for consideration and decision during the meeting.
Budget Strategy reviews the requests and renders a decision.
The decision for requesting the retention of a GA Surplus, unspent capital funds, or funding a GA Deficit may be one of the following:
- Fully approved as requested;
- Partially approved; or
- Denied.
When Budget Strategy decides on the request, the Assistant Vice President for Financial Planning & Analysis, or delegate, sends an email to the Lead Administrator or requestor informing them of the decision. Based on timing, it is critical that the final actions, which most likely require a final journal entry in Workday, occur quickly. Therefore, notification about a decision takes place no later than one business day following the Budget Strategy meeting.
In order to facilitate the year-end closeout, the unit must take immediate action based on Budget Strategy’s decision. The planning unit’s budget analyst facilitates all required journal entries because the decision will be rendered during the adjustment accounting period when all journal entries must be initiated centrally.
A planning unit that has received approval to carryforward a GA Surplus provides a Chart of Account (“COA”) (non-GA) to the budget analyst for the journal to shift GA funds to that designated non-GA COA. A planning unit that has not received approval to carryforward a GA Surplus has no additional action to take. The final GA Support entry initiated by Financial Planning & Analysis (“FP&A”) returns the surplus funds to a central account.
A Planning Unit that has received approval to carryforward capital funds has no further action to take. FP&A communicates the approval to the Capital Asset Accounting team so future transactions supporting the capital spend are authorized in accordance with the approved extension.
A planning unit that has received approval for a GA Deficit has no further action to take. The final GA Support entry initiated by Financial Planning & Analysis credits additional funds to the planning unit’s COA.