Original Issuance Date: November 1994

Last Revision Date: March 22, 2022

1. Policy Purpose

This policy provides direction regarding budget monitoring within the systemwide financial system and the need to adjust institutional Annual Operating Budgets during the fiscal year.

2. Responsible UW System Officer

Vice President for Finance

3. Scope

This policy affects any individual who executes, manages, and approves budget transfers including chief business officers, budget directors, and controllers.

4. Background

At the beginning of each fiscal year the approved UW System Annual Operating budget is loaded into the systemwide financial system’s budget ledger. During the fiscal year, institutions often find it necessary to adjust their Annual Operating Budget due to unanticipated savings or shifting of institutional priorities. These adjustments may be to budget accounts or to program codes. Budget transfers are processed to affect a change for the current fiscal year only. It is expected that institutions will make all permanent budget adjustments through the Annual Budget process.

In addition, funding for some programs is budgeted on a systemwide basis and allocated to the institutions during the fiscal year via budget transfers. Budget transfers are also prepared for supplemental funding and/or spending authority approved by the Department of Administration (DOA). This policy applies to any changes made to the Board of Regents approved Annual Operating Budget.

5. Definitions

Annual Operating Budget: The University of Wisconsin System budget is based upon the State’s biennial budget signed by the Governor and annually approved by the Board of Regents.

Block Grants: The consolidation of General Purpose Revenue (GPR) appropriations, into one GPR “block grant” to fund general program operations and one GPR debt service appropriation.

Budget Categories:

GPR General Purpose Revenue- General purpose revenues consist of general taxes, miscellaneous receipts and revenues collected by state agencies which are deposited into the general fund and are available for appropriation by the legislature.
PR Program Revenue- Program revenues consist of revenues which are deposited into the general fund and are credited by law to an appropriation to finance a specified program or state agency.
SEG Segregated Funds- Segregated fund revenues are revenues, which by law, are deposited into funds other than the general fund and are available for the purposes for which such funds are created.
PR-S Program Revenue-State- State revenues are moneys received from the state government which may be deposited as program revenues in the general fund.
PR-F Program Revenue-Federal- Federal revenues are moneys received from the federal government which may be deposited as program revenues in the general fund or as segregated revenues in the segregated fund to finance specific purposes.

Fund Types:

Annual Annual Appropriations- An authorization that is expendable only up to the amount appropriated by the Legislature and only for the fiscal year for which it is appropriated. Amounts appropriated but unexpended or unencumbered generally lapse to the fund from which they are appropriated at the end of each fiscal year.
Biennial Biennial Appropriations- An authorization that is expendable only during the biennium for which appropriated by the Legislature. The amounts appropriated for each fiscal year represent the most reliable estimates of the amounts, which will be expended in each fiscal year. For accounting purposes, the appropriation for the first year of a biennium is the sum of the expenditures for that fiscal year plus the encumbrances at the close of that year. The appropriation for the second year is the unexpended and unencumbered balance of the appropriation at the end of the first fiscal year. Amount appropriated but unexpended or unencumbered at the end of a biennium lapse to the fund from which they are appropriated.
Continuing Continuing Appropriations- An authorization which is expendable until fully depleted or repealed by subsequent action of the Legislature. The appropriation for any fiscal year consists of the ending balance from the previous fiscal year plus the revenues received or the new appropriation authority granted in the current fiscal year. Specific dollar amounts appearing in any type of appropriation listing or schedule only represent the most reliable estimates of the amounts to be expended or encumbered during any given fiscal year and are not considered as limiting.
Sum Sufficient Sum Sufficient- An authorization which is expendable from the indicated source of funds in the amounts necessary or sufficient to accomplish the purpose for which provided. The amounts appropriated represent the most reliable estimate of the amounts that will be needed for the stated purpose.

 Major Budget Categories: DOA-defined categories for classifying transactions:

DOA Account DOA Allotment Description Budget System Accounts
A000000 Unallocated Reserve UNALLT
A000001 Permanent/Project Salaries FACSALARY
A000002 LTE/Miscellaneous Salaries LTE_SALRY
A000003 Fringe Benefits FRINGES
A000004 Supplies and Services/ Permanent Property SUPPLIES
A000005 Debt Service DEBTSERV
A000006 Local Assistance/Aids to Indiv and Org FELOSCHOL
A000007 Special Purpose SPECLPURP

While the UW System no longer budgets by major class, all UW accounts, including budget system accounts, are mapped to one of the DOA accounts.

Prior Year Encumbrances: The purchase order carryover encumbrance balance recorded in the systemwide financial system and certified by each institution as part of the prior year end closing.

Program Codes: University expenditures are recorded by functions established by the National Association of College and University Business Officers (NACUBO) for higher education operating activity. Each program code is assigned an appropriate NACUBO function code: Student Services, Institutional Support, Instruction, Hospital, Research, Public Service, Academic Support, Physical Plant, Auxiliary Enterprises and Financial Aid & Farm Operations that are used as the basis for assigning program costs in the Annual Operating Budget.

Systemwide Financial System: Accounting system used by UW System institutions to account for all transactions including assets, liabilities, fund equity, revenues, expenditures, and budget transfers.

6. Policy Statement

At the beginning of each fiscal year, each institution’s final approved Annual Operating Budget is loaded into the systemwide financial system’s budget ledger. Institutions enter their Prior Year Encumbrance data into the systemwide financial system. the institution must initiate the appropriate budget adjustment action according to SYS 308.A, Budget Transfer Process. Institutions are also responsible for monitoring their budgets. If, during the fiscal year, an institution determines it may be in an overdraft status in any appropriation or budget account by fiscal year end, the institution must initiate the appropriate budget adjustment action according to SYS 308.A, Budget Transfer Process. There should be no overdrafts on final, year-end reports.

If it is determined that net institutional appropriation totals and/or budget account levels need to be adjusted, these can be entered by the institutions according to the attached Block Grant/Appropriation Type by fund.

Budget transfers between different block grants are not allowed. However, budget transfers between funds within a specific block grant are allowable.

Auxiliary Operations, PR-Continuing, PR-Federal-Continuing, Seg-Continuing budget increases/decreases may be entered by staff at UW System institutions. Changes on SEG Annual funding require prior UW System Administration approval. Increases for all other appropriations must be approved and entered by UW System Administration.

Intra-institutional Budget Transfers

Intra-institutional budget account shifts may be entered by staff at institutions, with the exception of GPR Salaries or Fringe Benefits. Institutions are not authorized to increase GPR Salaries or Fringe Benefits over their Annual Operating Budget balance.

All intra-institutional transfers involving program shifts must be entered by the institutions into the systemwide financial system’s budget ledger. Institutions are expected to meet departmental needs for budget increases/decreases and account shifts through use of campus-wide clearing departments (such as departments with identification number 98xxxx).

Inter-institutional Budget Transfers

Inter-institutional budget transfer requests need UW System Administration approval and must include detailed reasoning for the transfer and/or award letter and a completed budget transfer request form with the appropriate coding and the name of the individual responsible for the funding at the institutional level. Once approved, the budget transfer will be entered by UW System Administration staff into the systemwide financial system’s budget ledger.

Reconciliation/Monitoring

UW System Administration shall ensure full use of all GPR appropriations and will reconcile the appropriation budget accounts contained in the systemwide financial system with those of the State of Wisconsin accounting system. If necessary, allotment transfer requests will be initiated on a periodic basis, according to the reconciliation and projected trends in expenditure patterns.

Systemwide budget status and transfer activity will also by monitored by UW System Administration using the systemwide financial system’s budget ledger. While most budget transfers are not required to be submitted for prior approval, such movements will be monitored through monthly reconciliations by UW System Administration. If an apparent problem exists, UW System Administration will notify the appropriate institution(s). Institutions are expected to take any necessary corrective action in a timely manner.

7. Related Documents

SYS 308.A, Budget Transfer Process

Appropriation by Block/Grant Fund

Budget Scenario Code Listing

Program Code and Definition Listing

UW System Annual Operating Budgets

8. Policy History

Revision 2: March 22,2022

Revision 1: December 12, 1996

First Approved: November 1994

9. Scheduled Review

April 2024