Budget Office

Policy

BUDGET CATEGORIES

Financial and budgetary procedure for the University System shall divide financing, accounting, and operation of fiscal affairs into two parts: first, educational and general programs, such as cost of instruction, research, public service, academic support, student services, institutional support, operation and maintenance of plant, and scholarships and fellowships, and such income as student fees, federal grants, endowment income, vocational funds income from sales, gifts, rentals, and other related items; and, second, auxiliary enterprises, such as dining halls, residence halls, and other related items.

702.0101 EDUCATIONAL AND GENERAL

The first division--educational and general facilities--will be financed with income derived under this division and with funds provided by the State. Any savings made in operation of this division shall be expended only at the direction of the Board. The Board shall also give due consideration to any loss that may occur in its operation.

702.0102 AUXILIARY ENTERPRISES 

The second division -- auxiliary enterprises -- shall be placed on a self-supporting basis, and the state will not make appropriation to finance its operation. Funds collected from these enterprises will be used to provide the best possible services that can be provided for the amount charged without subsidy or support from the funds of the institutions for maintenance and utility services. Accounting records for auxiliary enterprises will be maintained on the full accrual basis of accounting, therefore, funded depreciation will be required for all auxiliary enterprise service equipment, buildings, infrastructure and facilities, and other improvements. The reserve for depreciation will be used for repair and replacement of auxiliary assets according to guidelines provided in the Business Procedures Manual. The funds collected will be left with the institutions.

Intercollegiate athletics shall be classified intercollegiate athletics shall not be commingled with other auxiliary enterprise funds.

702.02 OPERATING BUDGETS

Each institution of the System shall prepare an operating budget for educational and general activities and an operating budget for auxiliary enterprises of the institution for the fiscal year within the limit of funds allocated plus estimated internal income of the institution. Operating budgets of separately incorporated athletic organizations are specifically excluded from this process, although the transfer of student fees to those separately incorporated organizations must be reflected as a single item in the budget submitted to the Chancellor (BR Minutes, 1946-47, pp.214-15).

702.03 BUDGET AMENDMENTS

Institutions are authorized to amend their annual operating budgets without prior approval of the Board of Regents except that any amendment which exceeds $1 million and involves state general fund appropriations, auxiliary enterprise funds or student activity funds shall be submitted to the Board of Regents for approval. Prior Board of Regents approval shall not be required for any budget amendment involving special purpose state funds, non-state funds, or internal revenue sources. Institutions shall be required to report quarterly on all budget amendments to the Vice Chancellor for Fiscal Affairs and the Treasurer under procedures developed by his/her staff. The Chancellor or the Vice Chancellor for Fiscal Affairs and the Treasurer reserves the right to require prior approval of the budget amendments at any institution of the University System, which he/she determines, has failed to manage its budget within available resources or in a manner consistent with Board of Regents goals and priorities. Under these circumstances, the Chancellor or the Vice Chancellor for Fiscal Affairs and Treasurer may request the institution to develop a remediation plan to assure more appropriate decisions on future budget changes (BR Minutes, 1951-52, pp. 365-66; June, 1999, p. 17).

702.04 LIABILITY FOR EXPENDITURE OF BUDGETS

Bonds of public officials authorizing expenditures for any purpose whatsoever that are in excess of budget amounts approved by the Board shall be liable for such unauthorized expenditures.