Operating Budget Surpluses

Introduction

Each year the University allocates operating budget funds to its units. This policy deals with the disposition of unspent operating budget allocations (positive carryforwards) at the University’s fiscal year end of April 30.

Policy

Year-end departmental operating budget surpluses are available for units to spend in the following fiscal year at the discretion of the Dean/Associate Vice-President/Director subject to the following restrictions:

• The maximum carryforward is 10% of the unit's current year total operating expenditure budget.
• If a unit is engaged in multi-year planning for a one-time expenditure, they may request in writing to the Vice-President (Administration) to exceed the 10% maximum.  Approval for such requests will not be unreasonably withheld as long as the planned expenditure is one-time in nature and not for ongoing operating expenditures. This information and long range planning should appear in the unit’s annual budget submission. 

Carryforwards permitted are funded and backed by resources.

Amounts which revert back to the central budget are allocated to the following uses:

• To balance the current year's operating fund budget;
• To reduce the University's accumulated operating fund deficit to zero;
• One-time funding for institutional priorities as part of the annual budget cycle; and
• One-time discretionary allocations to units.

Exemptions

Certain budgets are permitted to have a 100% carryforward, allowing them to be spent in the following year without a 10% of budget maximum. This exemption recognizes the unique cash flow timing of those units. Budgets receiving this exemption are:

• Library acquisitions budget;
• Graduate and undergraduate scholarship budgets; and
• Certain operating fund FOAPALs where the funds received are similar to contracts with annual funding being received from external sources and are committed to be used for specific purposes.

The Centre for Continuing Education is also exempted from this policy. CCE has a mandate as a cost recovery unit to break even or make a profit and is integrated within the general operating budget.

At the discretion of the University Budget Committee, the sharing formula may be adjusted for a particular fiscal year. In that case, units will be notified of the change before their annual budget submissions are due.

Consequences for Noncompliance

Year end operating budget surpluses exceeding 10% of the unit’s operating budget will revert to the central budget.

Processes

Related Information

• GOV-090-035 Budgetary Limits on Spending