Budget Transfer Policy
Section: Fiscal Index: B-4
A priority of responsible budget management is to prevent cost centers from developing deficit balances; however, it is not always operationally possible to do so. This policy provides procedures to control deficit balances within cost centers by allowing individuals with cost center signature authority the flexibility and process necessary to maintain positive balances. The procedures apply to all budgetary authorities in all ledgers.
A budgetary authority (signature authority) shall review all PeopleSoft cost centers in the respective area as part of ongoing management procedure. Individual cost centers with a negative fund balance or identified as becoming negative by year-end shall have expenditures transferred from the cost center and/or funds moved to the cost center to bring the fund balance to at least zero. All such expenditure and fund balance transfers must comply with the restrictions on the cost centers involved. Transfers cannot be made between restricted or state appropriated funds and other local fund groups. Departmental transfers from one budgeted position to another position require the approval of the Executive Committee.
A budgetary authority which maintains two or more cost centers is given authority to be able to transfer money within a fund code (i.e., 2064 to 2064), but not between fund codes or ledgers, in order to cover expenses within the budgetary authority's area of responsibility. For example: The Facilities Director has two cost centers in the designated fund group 2064 (Ledger 2): Plant Support and Building Maintenance. If the Building Maintenance cost center appears it will have a deficit balance at year-end, the Director has the ability to transfer funds from the Plant Support cost center to cover the expected deficit.
To Transfer Funds Within Budgetary Authority
A budget journal is processed by the department through PeopleSoft for approval and approved by the Budget Department. The journal provides the appropriate cost center information, increase/decrease amounts, a short justification, and back-up documentation. The budgetary authority in the department approves the journal in PeopleSoft. Next, the journal enters the electronic workflow in PeopleSoft and moves to the Budget Journal Worklist for approval and processing in the Budget Department. When the transfer is approved, a notification is sent via PeopleSoft to the department.
To Request Additional Unallocated Funds
If the budgetary authority cannot transfer funds to cover an expected deficit, additional unallocated funds should be requested.
- Fund transfers of this nature are accomplished by providing appropriate cost center information, transfer amounts, and justification for transfer to the Vice President for Administration and Finance by email. Once approved, the Vice President for Administration and Finance will forward the request to the President for approval. If the President approves the request, it is sent to the Budget Director in order to make the budget adjustment.
UH System Administrative Memorandum 03.G.01 states that cost center deficits will be cleared before the close of the fiscal year. If the budget authority is unable to cover all deficits within his/her area of responsibility, then the Vice President for Administration and Finance shall make the necessary transfer to fund the deficits. The Vice President for Administration and Finance may require two conditions to be met:
- A plan be on file in the Vice President for Administration and Finance's office as to how the deficit cost center will be returned to a non-deficit position during the subsequent fiscal year and
- Sufficient money from other cost centers within the fund group (ledger) of the deficit cost center is kept in reserve to fund the deficit.
Budget authorities shall coordinate with the Comptroller to ensure that all transactions to clear deficit fund equity balances be accomplished in a timely manner prior to the final year-end closing.
UHS Administrative Memorandum 03.G.01
Signature Obtained 1/17/17
Raymond V. Morgan, Jr., Ph.D. Date
Next review date: January 2022
Origination: Budget Office