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Auxiliary Account Reserve Fund Balances Policy

Financial Planning & Budgeting Policy FPB 11 03

Purpose: This policy provides guidelines for the creation, use and replenishment of UNCP Auxiliary Reserve AccountsFund Balances.

Scope: Applies to University Auxiliary Accounts funded by user fees such as Central Stores, Printing, Bookstore, Food Service, Housing and Vehicle Registration) and is optional for Student Fee accounts.

Policy: The University will maintain adequate auxiliary accounts for University services that will be funded through user charges. The intent is for auxiliary entities to develop budgets, operating plans and price/fee structure to include the funding of a balance sufficient for renewals and replacements, required debt service, planned capital improvements, and sufficient operating contingency reserves for emergencies and revenue shortfalls in an amount equal to six (6) months of current year operating revenues.

Procedures: Responsible persons (FM) of Auxiliary accounts will maintain an adequate price/fee structure to cover the costs of all operations. The responsible person will assure to the following:

1. Prior year fund balances shall be used only for emergencies, non-recurring expenditures, or major capital purchases that cannot be accommodated through current year revenues as specified in the purpose.
2. After completion of the annual audit, if the fund balance exceeds planned expenditures and the required six (6) months operating expenses, the excess must be designated for specific subsequent projects or auxiliary charges for the services provided by the auxiliary account should be reduced.
3. Plans and budgets for the fiscal year should be submitted for review and approval by the appropriate Vice Chancellor so that an approved plan for anticipated receipts and planned expenditures will be delivered to the Office of Financial Planning and Budgets no later than May 1 prior to the beginning of the fiscal year.
4. Should the fund balance fall below the six (6) month operating revenue level, recommendations to restore the fund balance to the specified reserve level must accompany the current year budget plan.

Updated: Thursday, July 21, 2011

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