Budget and Cost Analysis

Effective Date: 07/01/95
Reviewed and Revised: 03/30/09

Policy Statement 1: University Budget Policy


General

The University budget policy provides for the budgeting and accounting expenditures, receipts and fund balances for State Funds, restricted Contract and Grant Funds, restricted and non-restricted Endowment, Trust and Special Funds by use of a Uniform Chart of Accounts.


Contracts and Grants

The budgetary administration of Contracts and Grants, under the University budget policy, is covered, along with other special policy considerations, under the Business Manual section on Contracts and Grants.


Endowment, Trust and Special Funds

The budgetary administration of restricted and non-restricted funds within Endowment, Trust and Special Funds are handled under the University budget policy. The nature of each fund will determine whether formal budgetary controls are required. It is the responsibility of the University Endowment, Trust and Special Funds Accountant, along with the person authorized to disburse the funds, to determine when a budget is or is not necessary. This will require the establishing of a "Fund Authority" to outline the budget and expenditure requirements and restrictions. Please contact the Special Funds section in the Comptroller's Office at 328-6757.

Lapsed Salaries

Purpose:
To establish guidelines and procedures for budget codes 16065 and 16066 to insure compliance with UNC Policy 600.3.1 Section A1 (g) and to aid the required audit of expenditures authorized under budget flexibility as required in Section A1 (h).

Definitions:
Special Responsibility Constituent Institution (SRCI): Designation received by universities who qualify for privileges granted under the Management Flexibility Legislation

Lapsed dollars: Salary and benefit dollars lapsed due to vacancy in position or temporary move of person to non-state funding source.

Budget entries authorized under flexibility legislation:

Budget entries moving lapsed dollars to operating lines (i.e. Supplies, equipment, current services, etc.) The Chancellor and Executive Council establish priorities and approve requests as described in procedure below.

    1. Lapsed dollars generated by moving salary/benefit expenses to grants or contracts may be spent as directed by the unit in accordance with state and university guidelines. This is to provide incentive for and encourage units and individuals to seek external funding.
    2. Lapsed dollars are used by the Graduate School to support graduate students via tuition remissions and awards. The Dean of the Graduate School makes these allocations after conferring with the Vice Chancellor for Research and Graduate Studies.
    3. The Coastal Resource management program uses lapsed dollars to cover awards made to PhD students. These funds are awarded to the students via the cashier’s office.

Procedure:
The Financial Support Team, a team consisting of administrative financial managers from each of the University’s Divisions, will prepare a projection of lapsed dollars and recommendation of expenditure commitments (qualifying commitments are for non-recurring items consistent with the use of state appropriated funds). These recommendations are reviewed by the University’s Executive Council (the Chancellor, Vice Chancellors and the Chancellor’s direct reports).

Projections are updated, and the status of funds available is communicated to the Executive Council throughout the fiscal year. Lapsed Salaries are reallocated in phases as projections indicate availability of funds.

When requests are approved, the expectation is that these reallocated funds will be spent by June 30 for purposes approved by the Chancellor. In accordance with Section 600.3.1 Section A 1(g), the Chancellor has delegated authority to the respective Vice Chancellors to allocate his/her division’s funds among approved initiatives. If a Vice Chancellor determines that he/she does not have an approved initiative on which the funds can be spent by June 30, then he/she should notify the University Budget Director so that funds can be redirected centrally in a later phase. If this determination is not made in time for redirection, then the funds will be managed along with any other remaining University funds. This money will be used to address remaining institutional priorities, any state reversion requirements or carry-forward targets established to support University priorities in the following fiscal year.

Prior to preparation of the annual Management Flexibility Report, the University Budget Office will request from divisions information regarding any redirections made at the division level.

Movement of budget between purpose codes (i.e. Instruction, Academic Support, Institutional Support, Student Support, Physical Plant, etc.)
Procedure:
These entries must be approved by the University Budget Office.

Permanent moves of budget between salary/benefit lines and other lines to reduce/abolish or increase/create positions.

Procedure:
These entries must be approved by the University Budget Office.

Note that these funds may not be used to support regular salary and/or benefit payments to permanent employees.

Review by Internal Audit:
UNC Policy requires each SRCI institution’s Chancellor to review an annual internal audit report on expenditures authorized under flexibility. ECU’s Internal Audit staff will perform this review and submit a report to the Chancellor. To facilitate this process, units must maintain and be able to provide appropriate documentation supporting all expenditures from these lapsed dollars. (This would include purchase orders, travel information, etc.)