I. Purpose

The purpose of this document is to provide policy and guidance for Boulder campus financial resource management as directed by the University of Colorado Administrative Policy Statement (APS) 4058, “Budget and Net Position Internal Reporting.” This campus policy reinforces prudent business practices to ensure good fiscal health, promotes the efficient use of funding, and aids in the development of spending plans that support the campus mission and goals.

The APS directs each campus to develop and maintain a revenue policy specific to the needs of the campus in order to provide clarity and guidance regarding unrestricted net position, the appropriate use of transfers, and cash carry-forward.

The APS also sets forth thresholds and annual reporting requirements for budget to actual variance, transfers, carry-forwards for the General and Auxiliary fund groups, and unrestricted net position for all funds. This is to improve clarity and communication to the Board of Regents.

II. Financial Management Goals

Boulder campus departments are expected to maintain adequate resources to cover expenditures, either budget or revenues as appropriate by fund type. Further, the Boulder campus is expected to employ consistent and proper reporting and categorizing of fund balances. Financial management and reporting of net position, carry-forwards, and campus budget versus actuals increases accountability and helps ensure the financial wellbeing of the campus.

III. Reporting and Management of Net Position

A. Unrestricted Net Position

Unrestricted net position (formerly net assets or fund balance) is defined as those resources that have no externally imposed restriction on use. These assets must be classified as unrestricted under generally accepted accounting principles. However, unrestricted net position may have internal restrictions/commitments, such as capital projects, academic and research initiatives, financial aid, and other University business.

Reporting on all Boulder campus unrestricted net position based on the prior fiscal year must be submitted to the Board of Regents prior to December 31.

B. General Fund and Auxiliary Fund Carry-forwards

Carry-forward represents resources remaining at fiscal year-end that are available for use in the next fiscal year. General Fund and Auxiliary Fund carry-forwards are calculated as follows:

The General Fund carry-forward, also known as the cash carry-forward or temporary roll-forward, is the budget balance available before encumbrances on June 30. If current year expenditures are less than the budget, the carry-forward is positive and increases the overall budget for the new fiscal year on a temporary basis. If current year expenditures exceed the budget, the carry-forward is negative and decreases the overall budget for the new fiscal year on a temporary basis.

The General Fund carry-forward must not exceed 1.0% of the current year budget at level four of the financial org tree as identified in the Cognos Reporting System. General Fund carry-forward in excess of 1.0% of the current year budget must be transferred to a plant fund.

Auxiliary Fund carry-forward is total revenues less total expenses plus net transfers on June 30. When current year expenditures are less than revenues, the carry-forward is positive and results in a net position increase. When current year expenditures exceed revenues, the carry forward is negative and results in a net position decrease.

Auxiliary funds with a carry-forward, surplus or deficit, greater than $1,000,000 at level five of the financial org tree must have a plan to address the surplus or deficit. Written plans approved by each unit’s respective Vice Chancellor Office are due to the campus budget office by October 1st each year.

Cash transfers Between Unrestricted Current Funds and Plant Funds

    General Fund surplus balances transferred to the Plant Fund are held for future obligations and commitments. This campus policy mandates holding these funds in the Plant Fund until the funds are to be expended.

C. CU-Boulder current funds budget v. actual

A report on variance between the Boulder campus current funds budgets and actuals, based on the prior fiscal year, must be submitted to the Board of Regents by December 31. Current funds include the General, Auxiliary, and Restricted funds.

D. CU-Boulder General Fund revenue variance

If the Boulder campus General Fund revenues are expected to vary more than 1.5% from the original budget and the campus intends to use the additional revenues in the current year, the Boulder campus must submit information for a Board of Regent approval by April 1st each year.

IV. Exceptions to Policy

A. Exceptions

Exception to this policy must be approved by both the Provost and the Senior Vice Chancellor or delegate(s).

B. Division implementation

Divisions can set more restrictive conditions and/or procedures than this policy in order to best comply with the requirements of this policy, and the management of the division.