Designated Funds

Overview

  • Designated funds are a subset of the General fund and therefore belong to the University. They account for funds from a specific purpose or activity.
  • NACUBO's Financial Accounting and Reporting Manual defines Designated funds as: "…current unrestricted funds represent(ing) … balances for operational purposes that have not been restricted by outside donors or grantors. These balances include funds that have been designated by the governing Board for specific purposes…."

Guidelines

  • Most commonly used activities include:
    • Sponsored Research Indirect Cost Recovery;
    • Athletic Camps;
    • Non-gift-related fund raising;
    • Extended Programs and Educational Outreach (EPEO) revenue share;
    • Certain lab fees and course fees; and
    • Conferences.
  • Except for EPEO revenue share and lab/course fees, revenues come from external individuals and groups who purchase goods and services provided by the activities listed above.
  • When revenue is recorded in a Designated fund, the associated expenses must be recorded in the same fund.
  • Designated funds are generally considered temporary but may be reoccurring (as in camps and conferences). Salaries of permanent staff and faculty may not be charged to designated funds without the Controller's approval.
  • Designated funds may be used to supplement General fund expenditures. This can be accomplished by a funds transfer [PDF] from the Designated fund to the General fund.
  • Conversely, General funds may NOT be used to supplement Designated funds, unless a Designated fund falls into deficit. (see Negative Balances below)
  • Designated funds are not used for University initiatives such as Institutes, Centers or Programs. These are appropriate for the General fund.
  • Designated fund balances at fiscal year-end roll into the new year. In addition, spending budgets are increased monthly when new revenue is generated.
  • For the requirements when unrelated business income tax is due or sales and use tax needs to be collected, see the Financial Reporting & Corporate Taxes page. 

Procedures for Establishing a New Designated Fund

Inactive Designated Funds

  • Designated funds with no activity for 24 consecutive months will be deemed inactive and reviewed for closure.
  • Notification will be sent to the Financial Manager and associated Vice President prior to closing.
  • The balance will be transferred to an alternative Designated fund within the department. If an alternative Designated fund does not exist, we'll transfer the balance to the department's General fund.

Negative Balances

  • Reports from General Accounting are sent to each Dean notifying them of a negative balance.
  • Upon notification, the respective Designated fund will be inactivated and additional spending will not be allowed until the negative balance has been cleared.
  • If a negative balance remains for 2 consecutive quarters the appropriate Vice President or Dean will be notified.
  • General Fund discretionary budget may be used to clear a negative balance. The Designated fund may then be permanently closed.

Signature Authority

  • A Department Head, Dean or AVP must notify General Accounting at [email protected] when a change in fund Financial Manager is necessary.
  • Include the following:
    • Fund code and title;
    • Name of the Employee to be removed;
    • Name and EID of the Employee to be added;
    • Effective Date of Change

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