R562, Non-Lapsing Balances

R562-1. Purpose: To provide limits and guidelines for non-lapsing balances in the Utah System of Higher Education (USHE).

R562-2. References

2.1. Utah Code 53B-6-102, Standardized Systems Prescribed by the Board

2.2. Utah Code 53B-7-101, Financial Affairs 2.3. Utah Code 63J-1-601, Budgetary Procedures Act

2.4. Policy and Procedures R120, Bylaws of the State Board of Regents

2.5. Policy and Procedures R561, Accounting and Financial Controls

R562-3. Policy

3.1. Authorization to Keep Unspent Funds at Year-end: The USHE is authorized to keep unspent appropriated operating funds at year-end rather than return them to the state General Fund. These funds include state tax funds; special or supplemental appropriations; mineral lease funds; and dedicated credits.

3.1.1. Funds Carried Forward Without Specifying Balance or Use Limits: The Budgetary Procedures Act §63J-1-601 authorizes USHE, including the State Board of Regents,2 to keep unspent fund balances and carry them forward into the next fiscal year without specifying any limit on the balance that can be carried forward or limiting the uses of those funds.

3.1.2. Reporting of Carry Forward Fund Balances: The institutions shall report to the Office of the Commissioner of Higher Education (OCHE) their fund balance prior to September 1. The OCHE will collect and submit this information to the Utah Division of Finance no later than September 1 following the close of the fiscal year.

3.2. Prudent Financial Management—Appropriate Carry Forward Balances: USHE institutions shall demonstrate prudent financial management by carrying forward an appropriate positive balance, from one year to the next, sufficient to handle emergencies and large one-time expenditures.

3.2.1. Institutions are encouraged to carry forward at least four (4) percent of appropriated funds.

3.2.2. Institutions should generally not carry forward more than seven (7) percent of appropriated funds, unless there are justifiable reasons for an exception. Such reasons may include saving for new programs, large equipment purchases, and new construction.

3.2.3. Encumbrances for outstanding purchase orders should be excluded when determining the final carry-forward balance.

3.3. Report of Non-Lapsing Balances that Exceed Guideline: The Board of Regents will expect a report each October 1 from institutions whose non-lapsing balances exceed the seven (7) percent guideline for the most recent fiscal year.

Adopted July 11, 2008. Amended by the 2009 Legislative General Session, passed by the Board of Regents on July 17, 2009.