University of Guelph
Carry Forward Policy
Approved by the Board of Governors
January 27, 2016
Each year University departments receive operating funds from a number of sources to support expenses incurred in the delivery of college/division programs. In the University’s Operating budget, funds are allocated to colleges or divisions as approved annual budgets intended for disbursement for expenses such as salaries and operating supplies over the course of a fiscal year. It is recognized that actual spending in any year will not always match the level of funding provided (as budget allocations) and variances will occur. (At the University level, unit -level underspending relative to the unit’s budget allocation will contribute to a surplus and overspending will generate a deficit.)
The purpose of this policy is to establish a framework under which annual operating Unit deficits or surpluses will be managed at fiscal year-end (April 30). The objective is to provide Units with the opportunity to manage funds prudently over time. For example, positive (underspending) variances provide units the opportunity to undertake multi-year planning for projects and provide for unexpected events in form of unit reserves. However it is also important to balance the accumulation of unspent funds with the use of annual operation budget allocations toward their intended purposes.
This policy will:
This policy applies to all expendable operating funds that have no approved and documented “restriction.” Restrictions in this case are specific directions that determine that certain funds are to be spent on a particular purpose e.g., on a specific project, program or asset. There are two types of restrictions; those of external (non-University) sponsors or those established under internal policy by the University or by a resolution of the Board of Governors. Units cannot designate that funding is restricted because they wish to designate it for a specific project/purpose. While funds may be intended for a specific use, unless expressly covered by University policy (or a documented external restriction), all operating funds are designated as unrestricted.
The following are the major types of funds that have some form of restriction and are therefore excluded from this policy:
The accumulated carry forwards limit at the end of any fiscal year will be capped at 10% of a Unit’s Gross Budget. The Budget column in FRS for the Unit at April 30 each year will be used as the base for this measure. Funds in excess of the limit will be transferred to central reserves.
100% of any deficits will be carried forward. Units will be expected to prepare plans for elimination of any deficits for approval by the responsible (for the unit) Vice-President.
Under exceptional circumstances, the responsible Vice-President may approve carry forward funds above the 10% limit. Exceptions will be considered only for specific committed purposes/projects that have a documented and approved purpose. Failure to use the funds for the stated purpose/project will result in transfer of the funds from the Unit.
“Exception” funds must be allocated for investments that enhance the quality and productivity of programs/services within the Units. The priority for approvals will be given for direct operating costs in major program areas within the Unit. In addition, where there is well-documented justification, consideration will be made for project objects such as;
Deadline; Carry forwards will be determined by June 30 following the close of the fiscal year (April 30). All exceptions must be documented, approved and forwarded to Budget & Financial Planning prior to this date. No exceptions or adjustments will be processed after that date.