Deficit Policy

Section I

Purpose

To provide guidelines for procedures that will be followed when a budget unit has created a deficit.

Section II

Procedure

Deficits in University accounts are not permitted. Accounts should be reviewed each month by budget managers and club sponsors to insure that deficits do not occur. Deficits arise from overspending budgeted amounts with fund numbers of 1 and 2, fund/department numbers 4-01201 through 4-05854, 4-07500 through 4-07599, and overspending cash balances for fund/department numbers 7-07400 through 7-07499. In all cases, budget managers and club sponsors are ultimately responsible for the financial management of their accounts. If a deficit is projected or indicated, immediate action should be taken to prevent or correct the problem.

Note: Budget transfers must be made by May 31 of the current fiscal year. Any moneys not spent or otherwise obligated as of June 30 of the current fiscal year will not be available for expenditure at a later time. Deficit balances existing at the end of year will be charged against the next year's budget.

Requisitions and purchase orders that will place an account in a deficit position will not be processed by the Purchasing System. Invoices presented to the Office of Business Services that will result in a deficit if paid will also be returned to the budget manager or club sponsor. Purchases of products or services from internal University departments (such as University Press, Motor Pool, Mail Room, etc.), will not be allowed from accounts with deficit balances.

If any account reflects a deficit, without proper documentation, the budget manager or club sponsor will be notified. Financial activities within deficit accounts will be suspended unless the deficit is cleared or written approval for a temporary deficit is provided within 30 days of notification. This will include wage payrolls and all internal billings.

Documentation

A written request with documentation for authorization of an account deficit must be provided to the Director of Business Services. Verbal requests will not be accepted.

Revised 4/99