Handbook of Business Procedures

2.7 Account Balances

A. Introduction

Accounts should not operate with negative cumulative balances.  The university will monitor account balances and take action to ensure positive (or $0) year-end balances.   

B. Monitoring and Controls

Accounting and Financial Management and the Budget Office will work with university constituents to monitor account balances. The following variables will be given consideration as part of the monitoring:

• Account type expectations 
• Approved overdrafts (as described in HBP 2.6)
• Cumulative negative year-end balance of at least $100
• Year-over-year and account historical trends 
• Documented exceptions to include, but not limited to:
  1. Accounts that are planned to be cleared after year-end
  2. Accounts that operate on a reimbursement basis
  3. New auxiliary accounts approved to operate in deficit until an agreed-upon timeframe to break even
• Processes and procedures established within CSUs

Accounting and Financial Management and the Budget Office will provide reports to CSUs and/or stakeholders.  

• Monthly:
  1. Service Centers (18-account)
  2. Plant funds (36-account)

• Annual Balance Review reports:
  1. A preliminary balance review report will be provided each summer in anticipation of fiscal year-end. No action will be required with this report; however, it should be used to take proactive steps to avoid deficit year-end balances.
  2. A post-year-end balance review report will be provided after adjusted balance forwards have posted. 
  3. A grant (26-account) preliminary project summary report will be sent annually and during the closeout process. No action will be required with this report; however, it should be used to take proactive steps to avoid deficit balances.

Grants (26-accounts) are monitored and managed by the Office of Sponsored Projects.

• Monthly reviews will be conducted by the project’s Principle Investigator.
• A preliminary project summary report will be sent annually and during the closeout process. No action will be required with this report; however, it should be used to take proactive steps to avoid deficit balances.

C. Expectations for Clearing Deficit Balances

Upon receipt of reports, CSUs should:

1. Review deficit balances and determine if action is needed prior to fiscal year end or resolve deficit balances greater than $100 identified on the post fiscal year-end report.
2. Take action, as requested, by Accounting and Financial Management or Budget Office.

If the CSU fails to clear deficit year-end balances by December of the following fiscal year (unless otherwise approved by AFM and Budget), Accounting and Financial Management and Budget will:

1. Work with account owners to identify alternate fund source for deficit clearing.
2. Use guarantee account to cover deficit.*
3. Mandate budget adjustments for future budgets, as needed.

* HBP Section 10.3.4 D requires guarantee accounts for unrecovered Service Center (18-Account)expenses or uncollectible revenue. When a service center account is in deficit, the associated CUBO officer will be contacted and given two options: (1) new rate review, taking into account the deficit, with a rate increase intended to erase the deficit within two years, or (2) Transfer funds from the guarantee account to cover the deficit.

Part 2. Fund Accounting - Table of Contents