POLICIES

BUSINESS PROCESS CHANGES EFFECTIVE 07/01/2006
 
DEPARTMENTAL DEFICITS

Deficits in university departments are not permitted. In all cases, department sponsors are ultimately responsible for the financial management of their departments and should take immediate action to prevent or correct any deficit problem.

Certain circumstances may require written pre-authorization of a temporary deficit for a special purpose. The authorization should include an explanation of why the deficit is planned. This request and approval process must be fully documented through the appropriate Provost/Vice President office. (For a more detailed explanation go to the University Guide to Services.)

Requisitions and purchase orders that will place a department in deficit will not be processed by Procurement Services but will be returned to the department sponsor. Invoices presented to Financial Support Services that will result in an department deficit, if paid, will also be returned to the department sponsor. Purchases of products or services from internal University departments (such as Printing Services, Physical Plant, Motor Pool, etc.) will not be allowed from departments with deficit balances.

If a department balance indicates a deficit without proper authorization, the department sponsor and the appropriate Provost/Vice President will immediately be notified. Unless the deficit is cleared or written approval for a temporary deficit is provided within 30 days of notification, all financial activities within the department will be suspended. This will include payroll and all internal billings.

If a deficit of any kind appears on June 30 financial reports, the appropriation for the subsequent fiscal year will immediately be reduced.

1. Department prepares a memo to the appropriate provost/vice president requesting an authorization for a temporary deficit.

2. The following information should be included in the memo:

1. Date of deficit,

2. Amount of deficit authorization requested,

3. Reason for deficit,

4. Date deficit will be cleared, and

5. Source of funding to clear deficit.

3. Upon approval, the provost/vice president will prepare a deficit authorization and will send the authorization to the controller.

The monthly position control detail indicates each department's salary and wage balance by account code. If one or more positions within an account code are in deficit, but the overall account code funding is positive, there is no need to transfer funds to clear the individual position deficit and to support the associated fringe benefits costs. The following object codes require fringe benefit funding: