ÀÖ²¥´«Ã½

I. PurposeÌý

The purpose of this procedure is to establish guidelines and processes for managing and resolving cash deficits in:Ìý

• Operating Funds 1X, 2X, 3X Ìý

• Renewal & Replacement Plant Fund FOPPS, Fund 72 and Fund 78Ìý

The procedure transitions the campus away from the use of negative PIE charges in FY27. The UNP automated transfers from linked Fund 72 speedtypes will continue to be handled by CCO through SFY27. In SFY28, CCO will transition the responsibility to the campus departments.ÌýÌýÌý

Moving to a standardized deficit management process will:Ìý

• Increase transparency and accountability for deficit balancesÌý

• Provide earlier visibility into emerging deficitsÌý

• Ensure units develop and implement clear resolution strategiesÌý

• Establish a consistent escalation process across campusÌý

Why speedtype deficit management now:Ìý

• Negative PIE charges and automated transfers mask financial issuesÌý

• Earlier deficit visibility improves financial stewardshipÌý

• Clear escalation ensures accountability while giving units time to resolve issuesÌý

• Aligns campus practices with peer institutions and stronger financial governanceÌý

• Deficits have been a growing issue for the campus since the federal transitionÌý

II. ReportÌý

We have created a new deficit report to show deficits by ST or project (sponsored projects) and projected shortfalls for all fundsÌý

• Budget & Finance (B&F) will provide the full report to unit budget representatives on a monthly basisÌý

• Report can be run at any time by unit finance staffÌý

• Report of deficit STs only will be provided to chairs & directors on a quarterly basisÌý

• Report of deficit STs only will be provided to deans on an annual basis (P998)Ìý

• Report of deficit STs only will be provided to executive leader for reporting units (Ann Stevens, Janel Forde, Todd Haggerty and Justin Schwartz, and/or delegate) and CFO on an annual basis (P998), including resolution strategiesÌý

• Report of deficit STs to be shared with CFO and Deputy CFO quarterlyÌý

Deficit Report Calculation MethodologyÌý

The deficit monitoring report uses different calculation methods depending on fund type to align with how financial activity is tracked and controlled within each fund.Ìý

• Calculation Method by Fund Type:Ìý
  • Funds 10 and 11 (General Operating Funds): Deficit balances are calculated as: Budget minus Actuals and include ID revenues, expenditures and transfers. This approach aligns deficit monitoring with budget authority and in-year spending activity.Ìý
  • Sponsored Funds (Funds 30, 31, 33): Deficits are calculated as: Budget minus Actuals and include expenditures and transfers. Calculations use life-of-project totals rather than only the current fiscal year. This reflects the nature of sponsored awards, which are managed based on the total project budget across the full award period rather than annual budgets.Ìý
  • 2X and 7X: Deficit balances are calculated using: Net Position (Assets minus Liabilities)Ìý
  • Gift Funds and CU Foundation Balances: Deficit balances are calculated using: Net Position (Assets minus Liabilities) + CU Foundation available balanceÌý

• Treatment of Cash and Prior-Year Balances Cash is treated as an asset within the calculation. Because of this, cash balances are included in the deficit calculation for funds that use the Assets minus Liabilities methodology. In many cases, cash represents the primary asset associated with a speedtype. However, it is not treated differently from other assets within the calculation.

III. ProceduresÌýÌý

Non-sponsored funds:ÌýÌý

• All deficits must be resolved at year-end unless additional context is provided regarding the resolution plan to B&FÌý

• P12 (annual) report will be provided by B&F to unit staff, including deans, with direction to resolve deficit by P998 or provide a written response to B&F for why deficit will persist and the resolution strategyÌý

• B&F to provide a form for written responsesÌý

• P998 (annual) report will be provided by B&F to unit staff, including deans, with request to provide a written response for all STs in deficit for why deficit persists and the resolution strategy by September 30ÌýÌý

• B&F will approve or deny resolution strategies by October 31Ìý

• B&F will monitor responses and resolutions on a regular basisÌý

• For any STs deficits for which written response is not provided or deficit resolution is not approved, ST will be placed in inactive status as of Nov 1 &:Ìý
  • An email confirming inactivation due to failure to respond will be sent to P998 report recipientsÌý
  • A meeting will be scheduled with relevant Officers and CFO to discuss resolution strategyÌýÌýÌý

• Chairs, Directors, and Deans may request ST inactivation by B&F if they recognize unmanaged spending by a ST ownerÌý

• Exception: Occasionally units are asked to create a deficit ST for campus balancing needs, these STs will not require a written response at year-end from the unit, B&F will provide the written response on behalf of the unit.Ìý

Sponsored Funds (30, 31, 33)Ìý

• Deficits in sponsored funds will be managed at the project level, not at the speedtype level, as budget constraints are placed at the project levelÌý

• If an award has co-PIs, recommendation is to establish separate projects for each co-PI to implement funding controls
  • If the above is not enacted, funding controls will be managed by campus at the project level regardless of number of PIsÌý
  • OCG has pre-award responsibility for co-PIs with one projectÌý

• Once any award or project (federal and non-federal) goes over budget ($1.00 threshold), the PI/fiscal staff receives a computer-generated warning.ÌýÌý

• Exception: Approved at-risk extension or sponsor approval is received, but funding set up is delayed due to final negotiation.Ìý Email will generate and response from PI/fiscal staff can provide an update on the funding status.Ìý

• System Process:Ìý
  • Notification triggers will be based on OLT/ROL transactions rather than award level budget overruns.
  • All awards (cost reimbursable, LOC, and fixed price) are included.
  • A minimum threshold of $1.00 will be applied to trigger notifications.
  • Evaluation will occur at the contract line level while displaying all projects on the award.
  • Grants Management budgets will be used as the authoritative budget source.
  • Notifications will use actuals to date and state the "as of" date clearly.
  • Notifications will repeat every 30 days while the condition persists.
  • Notifications will be sent to the Primary Project Grant Administrator, and cc the Primary Project Grant Accountant and the Primary Project PI.
  • Existing OLT/ROL conditions will be included in the initial rollout.Ìý

• Escalation
  • Reporting of sponsored award deficits will follow the same procedures as non-sponsored funds, noted above.Ìý

• If an award has a sponsor that is noted to have solvency issues or is unable to remit payments in full, the department/institute will receive notification of the issue and must either stop spending or find alternative funding sources to support continued work.
  • Current practice alerts department at 60 days delinquent.Ìý

• If project STs are inactivated with deficits, the same procedure as above will be followed, noting the time frames will be different according to the requirements of the award, especially those in closeout periods.
  • If inactivated with a deficit, we will allow a reasonable time frame for resolution, but it will depend on the specific limitations of the award, whether or not it is in closeout status, and if the deficit is impacting other expenses to be invoiced.Ìý RFS will request an allowable alternative ST to be removed from the award and applied to the alternate ST. If no speedtype is given, the funds will be assigned to the unit (dean/VC) allocation ST. BFP will complete a journal to fund the inactive, deficit ST.ÌýÌýÌý

IV. Inactive Speedtype RestrictionsÌý

Once a speedtype is inactivated:Ìý

• Funds will not be able to be transferred from CUF to CUÌý

• New Marketplace requisitions will not be able to be created with inactive speedtypes, however pre-existing requisitions would still book activity including invoicingÌý

• Concur will not allow inactive speedtypes to be allocated to a report, but if the speedtype was allocated before inactivation the expenses will still book to that speedtypeÌý

• Payroll will go to a suspense speedtype instead of the inactive speedtypeÌý

• Online journals (entered by a human) will not be able to be validated/postedÌý

V. Implementation TimelineÌý