Financial Policy Guidelines for Carryforwards and Reserves

Year End Review and Training Carryforward Elena Stoian Jennifer Khuu 1

SFSU Policy: Designated Balance, Reserves, and Carryforwards Designated Balances and reserves Designated balances and reserves ensure the University s financial health and stability. Designated balances and reserves may be accumulated in good economic and budgetary years to prepare for uncertain or negative ones. Carryforward Balance: Carryforwards are the difference between budgeted expenditures and actual expenditures in the general operating fund. Carryforwards represent resources that can be used in the next or future years. Carryforwards happen when the Cabinet s budget expenditures exceed actual expenses. Designated balances and reserves must be recorded and reported on an annual basis. Annually, in concurrence with the University s President and Vice Presidents, the Vise President and Chief Financial Officer must certify that the amounts and purposes of campus-designated balances and reserves follow CSU policy. 2

SFSU Policy: Designated Balance, Reserves, and Carryforwards Designated Balances and reserves In a good economic year, carryforward may be accumulated from the difference between budget expenditures and actual expenses in the general operating fund. However, during economic downturns and declining enrollment, some units might have experienced budget overruns or negative carryforward balance as the actual expenses exceed the budget expenditures. The Positive or negative balance from operating fund (NG001, NG025 & NR101) (without encumbrance) will be rolled into the NR401, which includes the prior year s undesignated carryforward balances. For the units have a negative balance and without prior year undesignated CFW, additional conversations with the budget Office and CFO offices will take place to analyze available opportunities. 3

CSU Policy and Campus Procedures Recording and reporting: Recording and reporting of carryforwards are subject to CSU 300.1 policy. Generally, the units with carryforward balances must demonstrate through the assignment of the designated category a spending plan for carryforward balances. This will allow the campus and units to monitor how carryforwards are spent. Carryforward will be recorded at the designated categories, fund, department, and project ID. Budget Administration and Operations, on an annual basis, will assist the colleges and divisions in assigning project IDs to record carryforward. 4

ICSUAM EQUITY ACCOUNTS VS CAMPUS CATEGORIES Definition: * Designation for Encumbrance Called encumbrance or open commitments. Encumbrance carryforwards will record under the same fund where it was created in the University s financial system. It is with a purchase order (PO) issuance. * Outstanding Commitments are planned uses of funds tied to specific commitments, program development, and carryforwards earmarked, other than encumbrances. Project IDs must be set up to record funds used in the University s financial system. * Reserve a specific fund category recognized in the accounting system and generally used for self- supporting, auxiliary activities, or campus-based student fees. Some popular types are reserves for equipment, reserves for capital improvement, and/or deferred maintenance. 5

CAMPUS PROCEDURES: ASSIGN PROJECT ID1 Outstanding Commitments1: Operating fund (NG001, NG025, and NR101) year-end available will roll over to NR401 as a beginning carry forward balance. The outstanding commitments will be recorded in NR401 with project ID for a not to exceed two years spending plan. OUTSTANDING COMMITMENTS DESCRIPTION FOR ACADEMIC UNITS PROJECT ID2 A1-Start-up funding for faculty recruitment CF23A1xx A2-Retention funding for faculty CF23A2xx A3-Fellowships CF23A3xx A4-Endowed chairs CF23A4xx A5-Temporary employee CF23A5xx A6-All others: designate appropriate CF23A6xx A7-Renovation CF23A7xx 1. Supporting documentation approved by the appropriate decision-making authority is required. 2. The project ID includes CF-carryforward, FY-Fiscal Year, Type/Description, and Last two-digit number. 6

CAMPUS PROCEDURES: ASSIGN PROJECT ID1 OUTSTANIDNG COMMITMENT 1: Operating fund (NG001, NG025, and NR101) year-end available will roll over to NR401 as a beginning carry forward balance. The outstanding commitment will be recorded in NR401 with project ID for a not to exceed two years spending plan. OUTSTANDING COMMITMENT DESCRIPTION FOR OTHER UNITS PROJECT ID2 U1-Temporary Appointments (contract employees) CF23U1xx U2-Special Projects CF23U2xx U3-Program Development CF23U3xx U4-Equipment CF23U4xx U5-All Others CF23U5xx 1. Supporting documentation approved by the appropriate decision-making authority is required. 2. The project ID includes CF-carryforward, FY-Fiscal Year, Type/Description, and Last two-digit number. 7

YEAR END BALANCES Operating Fund Reporting Sample Run the Manage My budget report from Data Warehouse: Filter NG001, NG025, and NR101, do not include work-study and benefits, and view by department and fund. Or run CYP report in PBCS Dept Level 4 description Current Budget Fund CYP Encumbrances Balance Available College of B NG001 530 20 10 500 College of B NG025 120 50 20 50 College of B NR101 100 100 0 00 College of B Total Operating Fund $750 $170 $30 $550 The $30 encumbrances will become encumbrance CFW remand under the same operating fund. The College/division will assign $550 to designation categories. BAO roll over $550 to NR401 with the assignment to designation and project 8

CAMPUS PROCEDURES: CFW BALANCES AND REPORTING SAMPLE The reporting template is available under Budget Administration & Operation web page: https://budget.sfsu.edu/budget-process-campus-reserve APPROVE D PLANNED ($) PLANNED AMOUNT ($) REVISED PLANNE D ($) BAO REVIEW PROJECT DIVISION DEPT ID Fund TYPE DESCRIPTION ID Start-up funding for faculty recruitment Temporary employee Graduation Initiative College A 3333 NG001 A1 300 College A College A Total roll over to NR401 3333 3333 NG001 NG025 A5 A6 200 50 $550 College A College A 3333 3333 NG001 NG025 Encumbrance Encumbrance 10 20 $30 Total CFW $580 9

CFW PRIOR YEAR BALANCES NR401 REPORTING SAMPLE Run the Manage My Budget report from Data Warehouse: Filter NR401, including benefits, and view by the department and project ID# Dept Level 4 description Current Budget Balance Available Project description Fund Actuals Encumbrances College of A CF21A619 - AT: OE Allocation FY21-22 NR401 120 0 0 120 CF21A635 - AA: OE Allocation FY21- 22 College of A NR401 196 24 0 172 CP210136 - CPO #21-0136 - One- Time Allocation College of A NR401 500 50 50 400 College of A Total NR401 $816 $74 $50 $692 The $50 encumbrances and $692 will roll over at the beginning of the year as a CFW. The balance will stay within the same fund and project ID unless the college/division reviews the project ID and re-appropriate the funding. 10

CFW PRIOR YEAR BALANCES NR401 REPORTING SAMPLE REVISED PLANNED ($) APPROVED PLANNED ($) BAO Balance Available DIVISION DEPT ID Fund Project ID DESCRIPTION REVIEW & ASSIGN PROJECT ID College of B 9999 NR401 CF21A635 AT: OE Allocation FY21-22 120 120 Same project ID College of B 9999 NR401 CF21A619 AA: OE Allocation FY21-22 172 -120 52 Same project ID CP210136 CPO #21-0136 - One-Time Allocation College of B 9999 NR401 400 400 Same project ID College of B 9999 NR401 Equipment 120 120 New Project ID $692 $0 $692 https://budget.sfsu.edu/budget-process-campus-reserve 11

CSU FUNDS REQUIRING CFW & RESERVE DESIGNATIONS CSU FUND CSU FUND DESCRIPTION PEOPLESOFT FUNDS TCXXX 441 Professional & Continuing Education (PaCE) Facility Revenue Fund-Health Facilities Fees TH202 452 Instructionally Related Activities Trust TAXXX 463 Parking Revenue Fund-Fines and Forfeitures TP003, TP026 471 TP021, TP022, TP024, TP025 Parking Revenue Fund Parking Fees 472 Lottery Education Fund TLXXX NGXXX, NRXXX, SUXXX, SEXXX, THXXX (except TH202), TSXXX TDXXX TUXXX 481 CSU Operating Fund 485 Housing Operations and Revenues Campus Union-Operations and Revenues 531 534 12

BUDGET YEAR-END DEADLINES DEADLINE ACTION ITEM Friday, June 16th, 2023 Last day to submit Preliminary Annual CFW & Campus Reserve Plan Please review all project IDs and close those ended or no longer needed projects. Reprioritize the funding for a new initiative, and work with your cabinet for other instructions that might impact your planning. Friday, July 14th, 2023 Last day to submit final annual CFW & Campus Reserve Plan Assign new project IDs for CFW roll over from NG001, NG025 and NR101 Friday, July 28th, 2023 Upload the CFW in CFS 13