CORRECTING DEFICIT FUND BALANCES

CORRECTING DEFICIT FUND BALANCES

It is important that you review your fund balances and give special attention to any fund reflecting a negative balance. In general, it is not acceptable for deficits to be carried in any fund type so if any of your funds reflect a deficit, you need to make arrangements immediately to process the appropriate paperwork and entries to resolve that deficit so the fund balance can be brought into a positive mode.

There has been a marked increase in the number and dollar volume of designated and gift funds that are in deficit. In many cases, there has been a direct negative impact on earnings of the Temporary Investment Pool where such deficits exist throughout the fiscal year. Based upon specific circumstances giving rise to a particular deficit, it is possible that a decision could be made to begin assessing interest on these deficits. Also, PPC and PPR funds are never to go into deficit and should always be pre-funded.

Listed below are some general guidelines and options by fund type to consider in clearing up deficits. Keep in mind that when doing transfers you cannot transfer from Restricted to Unrestricted or from Unrestricted to Restricted.

Designated Funds

1. Transfer like designated to like designated via A-123 using transfer object 870300.

2. Transfer expenses from ledger via A-169 NIU.

3. Move Payroll expenses to another fund by changing the PCR.

4. Deposit into fund.

5. Cannot transfer non-service center designated to cover service center deficits.

6. Cannot transfer service center to service center. Service Centers must cover all their costs by setting appropriate rates for their services. When a deficit occurs, that service should send a proposal to Peter Aamodt and the Recharge SubCouncil, asking for a rate increase.

Gift Funds

1. Transfer like gift to like gift via A-123 using transfer object F805.

2. Transfer expenses from ledger via A-169 NIU.

3. Move Payroll expenses to another fund by changing the PCR.

4. Transfer dollars from UC Foundation for deposit into fund.

5. Deposit new gift into fund.

PPC Funds

1. Deposit corporate check into fund. UC charges interest if the average daily balance is negative for whatever time period DURING a month the fund is in deficit. Therefore PPC deposits should be made early in the month to avoid potential interest charges.

Endowment Funds

1. Transfer expenses from ledger via A-169 NIU.

2. Move Payroll expenses to another fund by changing the PCR.

3. Can transfer like expendable endowment to like expendable endowment if the donor restrictions allow.

PPR Funds

1. Deposit corporate check into fund. UC charges interest on deficits for whatever time period DURING a month the fund is in deficit. Therefore PPR deposits should be made early in the month to avoid potential interest charges.

Government and Non-Government Agency Funds

1. Should not transfer cash between agency funds. While these funds are active they are normally one month in deficit. These funds will be settled at year-end in SAP but deficits and excess balances will post again in July of the new fiscal year.

2. Department/Unit/College should review ledgers each month. If payments are not in line with charges, Financial Services should be notified immediately to adjust invoicing.

3. Department/Unit/College should notify Financial Services immediately when activity is ceasing in an agency fund so Financial Services can settle up with the agency.

4. Department/Unit/College is responsible for covering shortfalls in agency funds if they did not monitor the fund in a timely manner and collections will not be forthcoming from the agency.

State Appropriation Funds

1. Transfer expenses from ledger via A-169 NIU.

2. Move Payroll expenses to another fund by changing the PCR.

General Funds

1. General funds with net positive balances will not roll to the next fiscal year with the exception of objects F960, F962, and 5000.

2. Any general funds with net deficit balances will be paid back and collected by our office, including fringe benefits where applicable (i.e. If your salary lines are in deficit without enough dollars in non-salary lines to cover the deficit, fringe benefits may be added to the payback).