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7.6.1 Excess Funds

Policy

Each year the University is required by the Legislative Audit Commission’s University Guidelines of 1982 (as amended 1997) to perform an “Excess Funds Test” as of June 30th. This test is required on an entity-by-entity (or fund-by-fund) basis.

The University Guidelines of 1982 (as amended 1997) state:

“All funds remaining in the accounting entities at the end of the fiscal year shall be paid into the Income Fund in the State Treasury within 45 days of the close of the lapse period [October 15] except as follows: Each entity is allowed to retain a working capital allowance at the end of the fiscal year.”

The working capital allowance is defined in the University Guidelines of 1982 (as amended 1997) as:

  1. "The highest month's disbursements (including not more than 1/12 of total annual transfers to bond reserves) for the fiscal year just completed; (Universities shall not organize disbursement patterns to create artificially high disbursement levels.)
  2. Encumbrances and current liabilities (excluding refundable deposits) chargeable to current year's operations and paid prior to the end of the State's lapse period (60 days after the close of the fiscal year);
  3. Deferred income and refundable deposits arising from previous cash transactions.”

Guidelines

Excess Funds Test

  • The Comptroller's Office recommends that Budget Officers (fiscal agents) monitor their Agency account balances carefully to avoid any excess funds problems.
  • A general rule for the Budget Officer to follow is to carry over an unencumbered balance no larger than the amount equal to the account's highest month of expenditures.

Initiating body: Vice President for Finance and Planning

Contact: Cashier's Office (309-438-5856)

Revised on: 04/2004


2016-07-28T12:13:04.796-05:00 2016
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