Carryforward Fund Balances and Reserve Guidelines
Learn about new campus guidelines for carryforward fund balances and reserves
Beginning with the 2018/19 fiscal year, the campus will build on its existing review process by providing policy guidance on carryforward balances, defined by Days Fund Balance.
These new guidelines:
- Establish a baseline of financial resources to reasonably protect the university against disruption in the event of unexpected revenue shortfalls or unanticipated expenditures, while confirming to stakeholders that their resources are being used prudently
- Intended to be a starting point for budget discussions to increase consistency and transparency, while recognizing the need for units to maintain flexibility to manage risks unique to their programs and operations i.e. revenue volatility and expense profile
Guidelines
Generally, for unrestricted carryforward fund balances, the following guidelines should be applied:
|
Type of Unit |
Days Fund Balance |
|
Administrative or Academic Units on a fixed base budget |
Up to 30 days |
|
Administrative or Auxiliary Units with significant reliance on self-support & external revenues |
30 – 90 days |
|
Clinical Units with significant reliance on patient revenues |
30 – 90 days |
|
Academic Units with significant reliance on extra-mural support & expected to provide PI bridge funding |
30 – 180 days |
Days Fund Balance Report
The Days Fund Balance Report has been developed to include a high-level view by Vice Chancellor, with further breakdown by Level 2 Org and Level 3 Org with a focus on balance and expense data for Core & Other Unrestricted Funds only.
Days Fund Balance = June 30th Ending Fund Balance ÷ (Annual Operating Expenses / 365)
Red/Green indicator displays if organization is within Days Range guideline. CBO did initial mapping of each organization into one of four categories provided in guidance document; please review & reach out if change is needed.
To run report for a single Vice Chancellor area or to view Days Fund Balance breakdown by fund type: Core, Other Unrestricted, Auxiliary, click below to access Cognos version.
OR
If you are already logged into COGNOS, go to team content/campus budget office/public reports/days fund balance.
Implementation
Spring: During annual Phase I Tactical Budget Meetings with the CFO, discussions include a unit’s projection of anticipated carryforward balances, expected cash‐flow from operations and planned one‐time investments.
Fall: After close of the fiscal year, during the Fall quarter, units will be asked to report on actual final fund balances as of June 30th. For fund balances being set aside for specific future commitments, whether they are department or faculty generated, units may be asked to identify obligations (for example: faculty start‐up package, renovation, equipment, bridge funding for PIs, one‐time investments, etc) tied to these balances and classify future carryforward spending into one of two main categories: Committed Obligations or Planned Expenditures by completing a CF & Reserve Balance Template.
- CF & Reserve Balance Template (Excel)
The template will be provided to each Vice Chancellor office and financial officers should coordinate with departments to provide requested information for Level 3 organizations highlighted in yellow, representing ‘Ending Fund Balance’ greater than $1M or ‘Days Fund Balance’ greater than 365. Follow-up meetings between CBO and each VC area will be scheduled to review as needed and possible outcomes may include requests to deploy and invest carryforward funds to:
- match or cost‐share specific activities or programs,
- advance high priority needs in lieu of a core funding allocation (full or partial), or
- invest (spend‐down) funds within a specific time period or conversely direct units to slow expenditures to build balances within a specific time period.
FAQ
Q: How do I interpret the red / green coding in the DFB Report?
A: Green indicates that the unit’s Days Fund Balance is within their appropriate range per the guidelines. Red indicates that the unit is out of range, either too high or too low (also can be negative if unit ended the year with a deficit).
Q: Which fund balances are included in the DFB calculation?
A: All core and unrestricted fund balances are included - See Fund Glossary (PDF).
Restricted funds such as Contract and Grant Funds, Endowment Funds, Loan funds, Plan Funds and Private Gifts are excluded.
Find answers, request services, or get help from our team at the UC San Diego Services & Support portal